PETALING JAYA: Biomass boiler manufacturer BM Greentech Bhd
’s third Corporate Green Power Project (CGPP) contract win announced last week underpins the company’s position in the solar segment of the renewable energy industry, analysts say.
Phillip Research, which has maintained a “buy” call on the stock with a target price of RM2.70, said the RM95mil contract from Nefin V Power Sdn Bhd marks the third contract under the government’s CGPP initiative.
The project will be undertaken as an engineering, procurement, construction and commissioning (EPCC) contract.
“We estimate the project’s gross profit margin to be about 8%, in line with typical utility-scale solar EPCC projects,” the research house said.
It added that it expects the company to capture a sizeable share of the upcoming Large Scale Solar 5 (LSS5), LSS5+ and LSS6 rollouts, which offer RM18bil to RM20bil worth of EPCC opportunities, providing strong earnings visibility.
Phillip Research noted that the company has a strong execution track record in commercial, industrial, and utility-scale solar projects.
The research house added that BM Greentech is looking to expand its solar footprint and has been exploring potential opportunities for asset ownership in renewable energy, including projects under the Corporate Renewable Energy Supply Scheme and battery energy storage systems to deploy its RM285mil cash reserve.
