Phillip Capital Research has revised its financial year 2027 order book replenishment assumption to RM1bil from RM300mil previously.
PETALING JAYA: Solarvest Holdings Bhd
is seen as a beneficiary of the large scale solar (LSS) programmes, including the LSS5 (two gigawatts or GW), the newly introduced LSS5+ (2GW) and LSS6.
It may also operate under a concession agreement for the battery energy storage systems (Bess) programme.
This reaffirms Phillip Capital Research’s positive outlook on the growth prospects of solar engineering, procurement, construction and commissioning (EPCC) players like Solarvest.
It is sitting on an order book of RM877mil and these new programmes could present up to RM20bil in EPCC contract opportunities over the next two years.
Given its strong market position, the research house said Solarvest has a competitive advantage over its peers in securing these contracts.
That led the research house to revise its financial year 2027 (FY27) order book replenishment assumption to RM1bil from RM300mil previously.
For FY25, earnings were adjusted downward by 1% to reflect lower project billings, though this was offset by higher margins.
Meanwhile, the FY26 forecast was raised by 18% to account for higher order book recognition and contributions from associates, which combined make up RM6.9mil in profit after tax.
It also increased its FY27 estimates after factoring in a higher order book replenishment.
The research house added that the Energy Transition and Water Transformation Ministry is expected to launch a new bidding round in the second half of 2025 for a Bess programme and community renewable energy aggregation mechanism.
While details on the Bess programme remain scarce at the current juncture, it is anticipated to operate under a concession agreement.
According to the research house, Solarvest is likely to pursue this opportunity as part of its long-term strategy to increase its recurring income base to 30% of total group revenue.
Phillip Capital Research maintained its “buy” call and raised its target price to RM2.54 from RM2 per share, implying a forward 28 times price-to-earnings ratio multiple based on fully diluted FY26 earnings per share of 9.1sen.
The key downside risks cited for its call include government renewable energy policy changes, project execution delays, intense market competition and volatility in solar module prices.
