Solarvest placement earnings dilutive, to be offset by new projects

PETALING JAYA: Solarvest Holdings Bhd’s proposed private placement will be earnings dilutive but this could be offset with income from its new projects.

The renewable energy (RE) concern has proposed to raise Rm56.7mil from the placement of 40.2 million new shares at an indicative price of RM1.41 a share, with the money set to be used for the capital expenditure required for its corporate green power programme (CGPP) as well as commercial and industrial (C&I) rooftop solar projects.

Maybank Research said the exercise will dilute Solarvest’s financial year 2025 (FY25) and FY26 forecast earnings per share (EPS) by 5.6% each, based on an enlarged share base of around 710.5 million.

“We have yet to impute the new income from the secured CGPP projects, pending finalised details from management. No changes to our earnings forecasts for now,” the research outfit said in a report.

About Rm12mil from the proceeds will be set aside for capital expenditure for C&I rooftop solar projects while another Rm26.5mil for capital expenditure for about 90Mwac CGPP projects that have been secured, in which Solarvest’s effective ownership is estimated at 43.5MWP.

Another Rm15.5mil will be set aside for working capital requirements. The proposed private placement is expected to be completed by the second quarter of this year (2Q24).

“We understand management is currently pursuing potential engineering, procurement, construction and commissioning project opportunities of about 443.4MWP under the CGPP for order book replenishment in 4Q24,” Maybank Research added.

Solarvest has also secured potential local corporate power purchase agreement of 110MWP under its RE platform, Powervest, and 23.5MWP of overseas projects.

“We expect Solarvest to continue growing its order book, capitalising on the 800MW CGPP projects, as well as new RE quotas of 2GW under Large Scale Solar 5 and 500MW quota under the Net Energy Metering,” it stated.

Maybank Research has thus maintained its “buy” call on Solarvest with an unchanged sum-of-part-based target price of RM1.76 a share.

Meanwhile, Bernama reported that Bandar Utama City Centre Sdn Bhd has appointed Solarvest’s subsidiary, Solarvest Energy Sdn Bhd, to install Malaysia’s largest on-site solar photovoltaic (PV) panels and building-integrated PV panels at the 1Utama Shopping Centre.