PETALING JAYA: Pantech Group Holdings Bhd
is poised to perform better financially with Phillip Capital Research projecting stronger earnings momentum for the second quarter of financial year 2027 (2Q27) due to improving pricing power and orders as well margins.
The research house’s optimistic outlook for the company is driven by two primary factors: resilient manufacturing demand, specifically for data centre cooling components in the United States, and a continued recovery in the domestic trading segment.
This has led to Pantech’s manufacturing utilisation rates remaining high at 90%, signalling robust operational health.
The research house’s positive outlook on Pantech is also based on the expectation of expansion in its core net margins, which are forecast to rise to 8.3%, up from 5.8% in financial year 2026 (FY26) as a result of investing in machinery.
“The installation of 10 advanced laser-cutting machines has reduced consumable costs by 80%,” Phillip Capital Research stated in its latest report on Pantech.
“Together with RM20mil capital expenditure in a new stainless steel pickling line and an additional two laser machines targeted for completion by end of FY27, these initiatives are expected to further support core net margin expansion.”
It attributed the improvement in margin expectations to the group’s successful strategy of progressively passing through rising input costs to customers via higher average selling prices (ASPs).
Between November 2025 and June 2026, Pantech raised ASPs for stainless steel and carbon steel by 25% and 10%, respectively.
These price revisions are recognised upon billing, the full financial impact is expected in the 2Q27 to 3Q27 results.
The high pressure seamless and specialised steel pipes maker and engineering company’s growth thesis is firmly backed by a strengthening order book and tender book. As of July, Pantech’s trading segment held an order book of over RM100mil for recognition within the current fiscal year.
Its tender book has surged by 80% year-on-year fuelled by offshore oil and gas developments and onshore gas pipeline projects across Peninsular Malaysia and Sarawak, the report noted.
Manufacturing lead times have also lengthened significantly – reaching up to 240 days for carbon steel – reflecting the high demand that supports a positive long-term outlook.
Phillip Capital Research maintains a “buy” rating on Pantech with a target price of 83 sen a share, based on an eight times price-to-earnings (PE) multiple on FY27 estimated earnings.
The stock is currently trading at six times FY27 PE and offering an attractive 9% dividend yield, making its valuation highly compelling.
