Solarvest Holdings (Solarvest) has reported a mixed performance for the first quarter of FY25, with net profit rising by 17% year-on-year to RM7.8 million. Despite a notable decline in revenue, the company's improved profit margins have been a positive highlight. Revenue fell 25% quarter-on-quarter and 57% year-on-year, largely due to the completion of LSS4 projects. However, the group's pre-tax margin saw an impressive increase of 8.9 percentage points, driven by better margins from EPCC and higher electricity sales from the LSS4 plants owned by Solarvest.
The company's net profit for the first quarter was just 16% of both internal forecasts and consensus estimates, primarily due to delays in CGPP EPCC works. Solarvest is awaiting the award for approximately 443MWp of CGPP EPCC projects, which are expected to boost the company's orderbook by around RM1 billion starting from the second or third quarter of FY25. Additionally, the company is targeting a replenishment of RM50 million per quarter from C&I projects and anticipates growth from the new 2GW RE quota under LSS5.
Analysts have maintained a positive outlook on Solarvest, with a BUY recommendation and an unchanged SOP-based target price of RM1.84, reflecting a potential upside of 19% from the current share price of RM1.56. Forecasts remain unchanged, supported by the company's RM469 million outstanding orderbook as of July 2024, which ensures earnings visibility into FY26.
