Samaiden Group Berhad (Samaiden) has posted a robust performance for FY24, driven by improved margins and significant growth in core earnings. The company has maintained its target price (TP) at RM1.57 and continues to hold a BUY recommendation.
All analysts have reiterated a positive outlook on Samaiden. A BUY recommendation is maintained with a TP of RM1.33 to RM1.57, reflecting potential returns of 22.3% to 44.0%. This confidence is based on Samaiden's strong performance in renewable energy initiatives and its ability to leverage new government programmes and schemes.
Samaiden's net profit for FY24 surged by 52% year-on-year, reaching RM16.0 million, which was 12.7% above forecasts and 4.4% ahead of consensus estimates. The strong earnings growth was attributed to large-scale solar projects and high-margin commercial and industrial (C&I) jobs. Despite a 23.7% sequential decline in revenue to RM57.2 million due to the nearing completion of several Large-Scale Solar 4 (LSS4) projects, profit after tax (PAT) increased by 41.4% quarter-on-quarter, driven by favourable margins on ongoing projects.
The company's outstanding order book, valued at RM313.5 million as of June 2024, is expected to sustain activity over the next three years. Prospects for order replenishment are promising, with upcoming EPCC tenders for the Corporate Green Power Programme (CGPP) and the 2GW LSS5, alongside additional quotas under the Net Energy Metering (NEM) programme. The group is also exploring new opportunities through a collaboration with Gruppe Lightning Solution Sdn Bhd to enhance its solar street lighting and renewable energy services in Southeast Asia.
Despite a slight reduction in the TP due to delays in biomass EPCC earnings, Samaiden remains well-positioned to benefit from a growing pipeline of solar EPCC projects. The company's solid financial position, with a net cash balance of RM122.3 million, underpins its near-term growth prospects and resilience in the renewable energy sector. The outlook remains bright, supported by ongoing and anticipated projects that align with national energy transition goals.
Source: Kenanga, RHB, MIDF
Title: The Sun Never Sets, More Opportunities Ahead; Maintain BUY, Bright FY24 Finish from Stronger Margins
