Affin Hwang Research believes the rollout of domestic renewable energy projects is shielded from the direct impact of trade war escalations.
PETALING JAYA: The country’s fifth large-scale solar five (LSS5) and LSS Petra 5+ programmes are expected to provide RM11bil and RM12bil worth of engineering, procurement, construction and commissioning (EPCC) opportunities in the next two years.
Affin Hwang Investment Bank Research (Affin Hwang Research) believes the rollout of domestic renewable energy projects is shielded from the direct impact of trade war escalations.
This is because investments are predominantly driven by government policies, which are aimed at achieving the national energy transition goals.
“The industry is gradually transitioning towards a more market-driven framework through the third-party access programme.
“The potential increase in conventional electricity tariffs starting in the second half of 2025 is expected to further incentivise businesses to adopt renewable energy and drive investments,” it said.
The research house added that the combined contract value of LSS5 and LSS5+ programmes’ EPCC jobs with a total 4GW quota available are expected to be executed in 2026 and 2027.
Affin Hwang Research said Solarvest Holdings Bhd
was aiming for a 30% market share from the LSS5 EPCC contract, maintaining its market leadership.
It added that Samaiden Group Bhd was targeting a 10% to 15% market share, while Sunview Group Bhd was currently bidding for an estimated 16% to 17% out of the total 2GW LSS5 quota.
“The upcoming LSS6 bidding, which is set for the second quarter of 2025, and the battery energy storage system programmes could provide further upside to order-book replenishment prospects for these companies,” the research house said.
It added that the introduction of the Community Renewable Energy Aggregation Mechanism programme bodes well for rooftop solar specialists such as Northern Solar Holdings Bhd and BM Greentech Bhd, as it facilitates monetisation of residential rooftop spaces.
The research house believes this would encourage more collaboration between property developers and solar companies in integrating solar photovoltaics systems into township developments.
It cited the collaboration between Solarvest and Fajarbaru Builder Group Bhd to develop net-zero Medi-City in Batu Kawan, Penang.
Affin Hwang Research has upgraded the sector to “overweight”.
This is due to the recently introduced programmes and the new battery energy storage system programme will keep the industry occupied for the next two to three years.
“This has exceeded our expectations since we downgraded the sector in October 2024, when only LSS5 and the Corporate Renewable Energy Supply Scheme were available to the market.
“The recent broad-based market correction provides an opportunity to increase exposure to secular long-term growth of energy transition themes,” it added.
The research house’s top pick is Solarvest. It also has a “buy” call on Samaiden.
