Quick take: LSS4 winners' shares trend higher

KUALA LUMPUR: A few listed companies which won the bid for Large Scale Solar @ MEnTARI (LSS4) project saw their stock prices increase this morning.

Among the winners are Advancecon Holdings Bhd, Solarvest Holdings Bhd, MK Land Holdings Bhd, Tenaga Nasional Bhd, Uzma Bhd and KPower Bhd.

Advancecon rose 5.13%, or two sen to 41 sen, Solarvest added 1.07%, or three sen, to RM2.84 and MK Land advanced 21.43%, or 4.5 sen to 25.5 sen.

Tenaga added two sen to RM10.82, Uzma rose 8.5 sen to 84 sen and KPower gained five sen to RM2.270.

Last Friday, the Energy Commission (EC) announced the list of 30 shortlisted bidders of the LSS4, totalling 823.06MW out of the offered 1,000MW.

The EC shortlisted plant capacities in two packages, of which package P1 to generate 323.06MW (price range from RM0.1850/kWh to RM0.2481/kWh) and package P2 to generate 500MW (price range from RM0.1768/kWh to RM0.1970/kWh).

Parties that win the LSS4 project bids are expected to start theory plant operation by 2023.

Kenanga Research noted that the LSS4 programme is for a minimum of 21 years, with commercial operations scheduled in 2022/2023.

“Based on our very rough back-of-envelope calculations coupled with what we gathered via our various channel checks, project IRRs should be within the mid-to-high single-digit range.

“Meanwhile, we guesstimate that capex should range roughly within RM3-4mil per MW, of which roughly more than 60-70% should be the cost of EPCC, with the remainder being land costs,” it said.

As an example, Kenanga said a 50MW capacity plant should have a rough guesstimated capex of RM160-180mil (include both EPCC and land costs).

However, it noted that these figures are based on its rough guesstimates, and could vary across different project owners.