Kenanga Research believes the company is on track to achieve its FY25 job win target of RM654mil.
PETALING JAYA: The outlook appears bright for Solarvest Holdings Bhd
after it secured a RM113.29mil engineering, procurement, construction and commissioning (EPCC) contract under the Corporate Green Power Programme (CGPP).
Solarvest bagged the EPCC contract in Pekan from P Solar Sdn Bhd, a consortium that includes Thong Guan Industries Bhd.
The project involves the development of a 29.99 megawatt (MW) large-scale solar power plant under the CGPP.
“We expect a strong influx of job opportunities in the immediate term.
“This is driven by the 800-MW CGPP with an end-2025 completion deadline and an additional 500MW quota under the net energy metering or NEM initiative,” said Kenanga Research.
The latest job win marked Solarvest’s second key job win in the financial year ending March 31, 2025 (FY25), boosting its outstanding order book to RM582mil, which can keep it busy for at least the next 18 months.
The outstanding order book comprised 58% EPCC works under the CGPP and the remaining for commercial and industrial or C&I projects.
The research house believes the company is on track to achieve its FY25 job win target of RM654mil.
“We view this latest contract win positively, marking its second major contract win in FY25 and bringing its year-to-date job wins to RM381mil, versus our full-year assumption of RM654mil.
“We anticipate a gross profit margin of 13%-16% from this job,” it said.
Kenanga Research anticipates that Solarvest stood a strong chance to secure at least RM720mil of the total photovoltaic system EPCC jobs under the CGPP, which is valued at an estimated RM2.4bil.
The research house has maintained an “outperform” call on the stock with a target price of RM1.91 based on a sum-of-the-parts (SOP) valuation.
“We like Solarvest for the bright outlook of the renewable energy (RE) market in Malaysia, underpinned by the government’s strong commitment towards RE, the export potential of RE and improved commercial viability of solar power projects on falling solar panel prices,” Kenanga Research said.
It also liked the company for its dominant market position with a market share of over 30% in the solar EPCC space, and its strong earnings visibility backed by sizeable outstanding order and tender books, and recurring incomes from a growing portfolio of solar assets.
Similarly, Maybank Investment Bhd Research is also positive on the outlook of Solarvest, keeping its “buy” call with an unchanged SOP target price of RM1.84.
The research house made no change to its earnings forecast, having imputed new outstanding order-book assumptions of RM600mil and RM800mil in FY25 and FY26, respectively.
“We remain upbeat on Solarvest’s prospects in growing its order book and asset base amid strong demand for RE in the medium to longer term,” it said.
