KUALA LUMPUR (Jan 15): T7 Global Bhd rose about 18.89% in morning trade today after it announced on Friday that it had formed a joint venture with a unit of China's largest construction and real estate conglomerate to bid for rail-related projects in Malaysia.

At 11.42am, the stock pared some of its gains and was up eight sen or 17.78% to a 33-month high of 53 sen, with 26.93 million shares traded, for a market capitalisation of RM213.32 million. Over the past 12-months, the counter grew about 48.61% from 36 sen.

T7 in a statement on Friday (Jan 12) said the JV — named T7 China Construction Third Engineering Sdn Bhd (T7CCTE) — will also take up other infrastructure and construction projects in the country.

The JV is 51%-owned by T7's subsidiary T7 Kemuncak Sdn Bhd and 49% by China Construction Third Engineering (M) Sdn Bhd (CCTE Malaysia) — a unit of China Construction Third Engineering (M) Sdn Bhd, which is in turn a subsidiary of China State Construction Engineering Corp Ltd (CSCEC).

Projects to be bid by T7CCTE include ECRL, MRT, LRT and other construction businesses in Malaysia, T7 said.

It was also reported in the latest edition of the Edge Malaysia that T7 Global is expecting to post a second year of profits in the year just ended and to carry the momentum into FY18, with new contract wins and stabilising oil prices.

For the cumulative nine months ended Sept 30, 2017, it posted a net profit of RM1.72 million compared to a net loss of RM4.73 million a year ago, while its revenue more than doubled to RM101.76 million, from RM46 million last year.

On Jan 2, it announced six contract wins amounting to RM260 million, with the longest contract stretching four years with an option to extend for another four years. Its executive deputy chairman Tan Sri Tan Kean Soon noted these contracts will start contributing to the group’s revenue this quarter.

While oil and gas (O&G) remains the group's core business, accounting for 70% of its revenue, Tan said its aerospace and infrastructure management services could surpass the O%G sector in the future.