PETALING JAYA: Sunview Group Bhd, en route to a listing on the ACE Market by next month, stands in good stead to take advantage of various catalysts that will spur its earnings growth in the solar photovoltaic (PV) business over the next few years.
The group’s CEO Ong Hang Ping told StarBiz the rising adoption of environmental, social and governance (ESG) practices, emphasis on renewable energy and the huge market for construction of solar PV facilities augurs well for Sunview’s bottom line.
He said it is not only the multinational companies that are cognisant of the need to implement ESG initiatives, but also the small and medium enterprises (SMEs).
There is an increasing number of companies in the country that have started to adopt and prioritise on implementing ESG policies to combat climate change, he said.
Ong said Sunview sees this as one avenue of growth for the group and is at the forefront of enabling the transition towards adoption of renewable energy.
Furthermore, he said the government has implemented numerous policies that would play crucial roles in incentivising homeowners as well as commercial and industrial companies to move towards renewable energy.
“For example, the Ministry of Energy and Natural Resources is aiming to increase the use of renewable resources for power generation from 23% or 8,450 megawatt (MW) of the total installed capacity in 2020 to 31% or 12,916MW in 2025 and a further increase to 40% or 17,996MW in 2035.
“This bodes well for the group’s prospects as there will be more jobs available in the market and we hope to leverage on our expertise and track record to continue securing more contracts,” he noted.
He said there is sufficient room for Sunview to grow, adding that the local market size for the construction of solar PV facilities in 2021 was RM2.1bil.
In contrast to the group’s revenue generated from its engineering, procurement, construction and commissioning (EPCC) and installation of solar PV of RM84mil in the financial year ended March 31, 2022, there is still plenty of room for it to grow and capture a larger market share going forward.
Sunview’s order book as at August 30, 2022 stood at RM558.34mil, which would provide earnings visibility till the financial year ending March 31, 2024.
Sharing on the group’s growth plans over the next three years, Ong said its focal point remains on the expansion of solar PV business by securing more contracts to bolster its order book by leveraging on its extensive track record from past projects.
Moreover, he said it intends to build a strong recurring income stream via the group’s solar power generation and supply business.
Currently, Sunview owns 18 solar PV facilities and it is constructing two additional solar PV facilities to further bolster its recurring income stream. He said this would help to supplement its project-based revenue streams.
“We also intend to expand into EPCC of biogas plants and complementary products for our solar PV business.
“The latter includes the Internet of Things solar energy system and current limiting reactor system for solar PV power applications as add-on options that may help improve our competitive advantage in bidding for new EPCC projects.
“Lastly, we plan to expand our market by setting up a new branch office in Johor and recruit additional work force to target the commercial and industrial application market in the southern region.
“We will carry out marketing activities that may increase our company awareness and generate sales leads for our business,” he noted.
On the challenges that may impact the group’s business, he said one of them would be in the form of an increase in the solar PV module prices that may affect profit margins.
As China is a major producer of one of the raw materials, crystalline silicon for the manufacture of solar cells, the China Covid-19 lockdown had caused a shortage within the solar PV industry and resulted in increases in solar PV module prices.
If China remains in lockdown, he said the solar industry may continue to suffer with higher prices of solar panels.
Nevertheless, Ong said it is not reliant on any one supplier, and would utilise its pool of suppliers to minimise risk of any supply disruption for solar PV modules.
Commenting on his wish lists for the upcoming Budget 2023, he hopes the government would continue to extend existing policies and tax incentives such as Net Energy Metering 3.0 and Green Investment Tax Allowance for another five years to increase the transition towards renewable energy.
He said the extended incentives and initiatives would be a good call to action for local companies to transit towards renewable energy and combat against the impending effects of climate change.
Sunview is slated to list on the ACE Market on Oct 17 and plans to use RM20.10mil or 58.72% of its listing proceeds for its working capital requirements.
It is set to raise RM34.22mil through its initial public offering via issuance of 118.00 million new shares at an offer price of 29 sen per share.
Upon listing, Sunview will have a market capitalisation of RM135.72mil, based on its enlarged share capital of 468 million shares.