KUALA LUMPUR (May 6): Phillip Capital has initiated coverage on T7 Global Bhd with a “buy” rating at 53 sen and a target price of 68 sen.

In a note on Monday, the research house said it likes T7 for the company’s unique value proposition, serving as a proxy to capitalise on the local operations and maintenance upturn, and backed by its steady recurring income from mobile offshore production units (Mopus).

Phillip Capital said it sees T7’s 2024 estimated earnings to be anchored by its Mopus, baggage handling system project and higher oil and gas activities.

“T7 stands out as a prime beneficiary of the rising capex spending upcycle, with strong earnings growth prospects and a consistent recurring income stream.

“Key risks to our 'buy' call include unforeseen project delays, higher-than-expected operating costs, sharp decline in global oil prices,” it said.