PETALING JAYA: Biomass boiler company BM Greentech Bhd
’s move to acquire solar firm Plus Xnergy Holding Sdn Bhd (PXH) is a positive one, which will boost and strengthen the group’s solar business.
Kenanga Research said it views the deal positively as it would strengthen the group’s solar segment by expanding its portfolio to large-scale solar projects.
Recall, the company focuses solely on residential, commercial and industrial projects.
PXH has an established track record of completing over 400 megawatt peak of solar photovoltaic installed capacity since its inception in 2013.
“Moving forward, we believe its solar segment will contribute about 30% of group profit after tax.
BM GreenTech is acquiring a 100% equity stake in PXH for RM110mil, to be satisfied with 81.5 million of the company’s new shares, translating to 12.5% of BM GreenTech’s enlarged share base, at an issue price of RM1.35 per share.
“We raise our financial year 2025 (FY25) to FY26 earnings per share forecasts by 6% and 4%, respectively, to reflect PXH’s earnings, partially diluted by the enlarged share base,” the research house added.
While maintaining its “underperform” call on the company, the brokerage said it liked BM GreenTech for its the long-term trend of investment and upgrading of palm oil milling assets driven by the growing environmental, social and governance awareness among palm oil millers
Kenanga Research also likes BM GreenTech for its strong customer base with reputable names in the industry such as Kuala Lumpur Kepong Bhd, Wilmar International Ltd and SD Guthrie Bhd and its growing presence in solar engineering, procurement, construction and commissioning space.
However, it said over the immediate term, amidst flattish crude palm oil prices, planters are likely to cut back on their capital expenditure including the replacement and upgrading of boilers.
