PETALING JAYA: MIDF Research expects more job flows for Pekat Group Bhd
from the Corporate Green Power Programme (CGPP).
The research firm said that Pekat currently has a strong order book within the RM200mil range, with some RM140mil to RM150mil of solar projects coming mainly from stronger growth in residential plus commercial and industrial rooftop solar jobs.
“Pending updated guidance from management, we hold on to the expectations that Pekat will be involved in the CGPP-related engineering, procurement, construction and commissioning jobs of 60 megawatt (MW), which will add a further RM220mil to RM250mil to its order book, which includes its own 29.99MW plant in Tronoh, Perak,” MIDF Research said in a report.
For its own CGPP quota, Pekat has via wholly owned subsidiary Pekat Solar Tronoh Sdn Bhd, has entered into agreements with five parties.
The agreement is for about 21 years, starting from the commercial operation date of the solar plant, likely in 2025, which will then be able to bolster Pekat’s recurring revenue stream.
It noted that Pekat had a strong third quarter of financial year 2023 (3Q23), with core net profit coming in at RM3.3mil.
This is a 61.2% year-on-year (y-o-y) growth on the back of strong rooftop solar projects.
For the cumulative nine-month period of FY23, the group’s core net profit grew 30% y-o-y to RM9.8mil, which the research firm said was “slightly above expectations, making up 81.7% of our full-year estimate”.
In its report, MIDF Research reiterates a “buy” recommendation on Pekat given its continuous robust performance, coupled with favourable government policies such as the CGPP and the National Energy Transition Roadmap that will benefit renewable energy companies, especially solar players. Pekat is also in a net cash position of RM25.8mil, which gives it room to fund further growth and investments.
“We maintain our target price for Pekat of 63 sen by pegging a forward price-to-earnings ratio of 25 times to its FY24 forecast earnings per share of 2.5 sen,” added MIDF Research.
