PETALING JAYA: Pekat Group Bhd
is set to ride on Malaysia’s aggressive renewable energy (RE) push with its newly acquired switchgear business as a game changer.
Kenanga Research said the government’s aggressive push for RE with Large Scale Solar 5 (LSS5) and LSS5+ which are four times bigger than LSS4’s 800MW – unlocks more than RM10bil in engineering, procurement, construction and commissioning contracts.
“Pekat, maintaining a steady market share of about 5%, remains selective in LSS projects due to tight margins, and is making aggressive moves on high-margin commercial and industrial segments.
“This is via Solaroo, tapping into underpenetrated rooftop solar market where only about 63,000 of Tenaga Nasional Bhd’s (TNB) 10.4 million retail customers are currently signed up and set to rise with a 14% base electricity tariff hike in the second half of 2025.
“Pekat is on track to double its residential and C&I revenue to RM120mil in the financial year 2025 (FY25),” it said in its initiation report yesterday.
Kenanga Research said Pekat’s newly acquired switchgear business, EPE Switchgear Sdn Bhd with 70% of its revenue from TNB, holds a 30% share in TNB’s tenders as one of its top four local medium voltage switchgear providers.
It estimates EPE’s earnings will surpass the RM10mil profit guarantee by 33% and 54% in FY25 and FY26 respectively.
Kenanga Research said Pekat is its new RE top pick. It has an “outperform” call on Pekat with a target price of RM1.60 a share.
