Solarvest Holdings Bhd

Solarvest has clinched its fourth major contract win in FY25, securing RM142m EPCC job for a 29.99MWac solar power plant in Kedah under the Corporate Green Power Programme (CGPP). This milestone brings its YTD job wins to RM627m, keeping it on track to meet full-year estimate of RM654m. The latest contract also lifts its outstanding order book to RM828m. Kenanga has   maintained its forecasts, TP of RM1.91 and OUTPERFORM call, reaffirming SLVEST as its sector pick.

The firm has secured a RM142m EPCC contract from SM01 Sdn Bhd, a special purpose vehicle in which SLVEST holds a 33% stake, for a large-scale solar power plant in Kuala Muda, Kedah. Kenanga believes the project is scheduled for completion by end-2025. The house views this contract win positively as it boosts its FY25 YTD job wins by 29% to RM627m (vs. our full-year assumption of RM654m). It also lifts its outstanding order book to RM686m (CGPP: 85%, C&I: 15%) which can keep it busy for at least over the next 18 months. The house anticipates a gross profit margin of 14%-16% from this job.

In the immediate term, Kenanga expects a strong influx of job opportunities driven by the 800MW CGPP with an end-2025 completion deadline and an additional 500MW quota under the NEM initiative. Based on its estimates, the house expects SLVEST to stand a strong chance to secure at least 30% of the total PV system EPCC jobs under CGPP, which is estimated at RM2.4b, translating to RM720m. Thus far ~RM936m contract awards under this programme announced by listed firms over the past three months.

Kenanga maintains its forecast as the RM654m order wins for FY25 is already been factored in, and this job win is not unexpected and maintains TP of RM1.91 based on SoP valuation, ascribing 30x FY26F PER for its EPCC segment (in-line with
the average historical 1-year forward PER of the solar EPCC sector) and DCF at a discount rate of 5.5% to 5.6% for its LSS4, CGPP, and Powervest assets.