Solarvest bags RM40 mln roo op solar EPCC job from Scientex
KUCHING: Solarvest Holdings Bhd (Solarvest) has been awarded a RM40.4 million engineering, procurement, construction and commissioning (EPCC) contract from property developer Scientex Bhd (Scientex) for a roo op solar installation on eight separate sites with a combined capacity of approximately 21MW.
The project is under the selfconsumption (SELCO) and net energy metering (NEM) schemes and is slated to be completed within the next 6 to 9 months.
In a company update, the research arm of Kenanga Investment Bank Bhd (Kenanga research) shared that they were positive on the latest contract win and are forecasting that the project will boast a healthy gross profit margin of 14 to 17 per cent.
The newest contract win has also boosted Solarvest’s outstanding orderbook to RM282.4 million which Kenanga Research reckons is on track to meeting their full-year win assumptions of RM654 million.
Looking ahead, the research arm anticipates that Corporate Green Power Programme (CGPP) contracts will continue to dominate the current photovoltaic (PV) system EPCC job flow in the coming months.
“In addition, PV system EPCC jobs will also be buoyed by an additional quota of 400MW which comprises of 100MW residential and 300MW commercial from Feb to Dec 2024 under the NEM initiative.
“Also, under the Solar For Rakyat Incentive Scheme (solaRIS) using the additional 100W NEM quota for the residential segment, participants will be offered rebates ranging from RM1,000/ kWac up to RM4,000/kWac,” the research arm shared.
Demand for renewable energy (RE) assets is also expected to grow organically as businesses have been observed to have voluntarily invested in solar energy assets following the recent hikes in electricity tariffs in an effort to save costs and address ESG concerns.
Overall, Kenanga Research is optimistic on Solarvest’s outlook as it is supported by the bright outlook of Malaysia’s RE scene, its strong market position and track record, and its strong earnings visibility that is backed by its sizeable outstanding order and tender books as well as its growing portfolio of solar assets that generate recurring incomes.
According to research arm, the outlook for Malaysia’s RE market is bright as it is supported by strong government commitment and initiatives, the export potential of RE and improved commercial viability on falling solar panel prices.
With that in mind, they maintain their ‘outperform’ call with an unchanged target price of RM1.91 that is based on SOP valuation that ascribes a 30times FY26F PER for Solarvest’s EPCC segment and a DCF at a discount rate of 5.5 to 5.6 per cent for its LSS4, CGPP and Powervest assets.