PETALING JAYA: The prospects for Solarvest Holdings Bhd are bright, as the company is in a sweet spot to take advantage of various business projects.
Analysts expect the company to generate stronger revenue and earnings going forward despite downside risks.
Most are upbeat that not only the company’s maiden large-scale solar four (LSS4) project would be a growth driver to earnings, but also the potential of its electric vehicle (EV) infrastructure business would further fuel growth, among others.
RHB Research said it expects financial year 2024 (FY24) forecast earnings to reach a new milestone with maiden LSS4 contributions and backed by a strong order book. The project is expected to contribute close to RM8mil to RM9mil to profit after tax annually.
It said Solarvest also aims to break into the EV infrastructure business due to this segment’s growth potential.
“We maintain our FY23 earnings forecast but raise the forecast FY24-FY25 bottom line by 8%-6% on the assumption of higher engineering, procurement, construction and commissioning orders,” it added.
However, it noted that given its March year-end, the research house thinks the FY23 margins will still be affected by 2022’s margin contraction and expects a slight earnings contraction in FY25 on higher finance cost assumptions.
RHB Research said the key risks include lower-than-expected contract wins, unexpected changes in project costs and a lack of progress in its overseas ventures in Taiwan and the Philippines.