PETALING JAYA: ACE Market-bound Verdant Solar Holdings Bhd
’s core earnings are projected to increase for its financial year ending June 30, 2026 (FY26), driven by its RM44.2mil order book as well as the ongoing and upcoming government renewable energy (RE) initiatives, says TA Research.
The research house said that Verdant Solar’s earnings are set to increase in FY27 and FY28, supported by the group’s business expansion plans and a positive industry outlook.
The solar panel provider is planning to raise RM44.02mil through its initial public offering (IPO), ahead of its ACE Market listing on Bursa Malaysia slated this Oct 22. The IPO entailed the issuance of 142 million new shares at 31 sen each.
According to TA Research, the Selangor-based group, which has branches in Penang and Johor, is expanding its presence across Peninsular Malaysia.
It plans to establish new branches in Melaka, Kuantan, and Ipoh.
“This expansion has an estimated cost of RM15.8mil to cover rental and renovation, recruitment of up to 42 personnel, marketing and administrative expenses, as well as working capital,” the research house added.
The group will also leverage mergers and acquisitions and strategic investments to expand growth.
The focus will be on companies in Malaysia involved in engineering, procurement, construction and commissioning of solar photovoltaic systems for commercial, industrial and large-scale projects, which offer larger contract values that will complement its residential segment.
TA Research noted that the group will also undertake digital initiatives to improve efficiency, decision-making, and customer engagement.
“The implementation of an enterprise resource planning system will centralise key functions such as accounting, procurement, supply chain and finance, allowing for real-time data visibility, improved reporting and streamlined processes,” it said.
TA Research noted that on a pro forma basis post-listing with utilisation of IPO proceeds, Verdant Solar’s balance sheet is expected to improve from a net cash position of RM21.2mil to RM62.5mil.
“Corresponding to our view on the outlook, we expect the group to record a three-year compounded annual growth rate (CAGR) for earnings of 21% on the back of a 25% revenue CAGR over the same period.
“This is driven by accommodative government policies to grow the rooftop solar industry.”
The research house also said its projections had factored in more conservative margins going forward, given a potential rise in solar panel prices on the back of policy interventions in the panel manufacturing industry in China.
In terms of valuation, TA Research has assigned a target price-to-earnings multiple of 13.5 times against Verdant Solar’s 2026 earnings and a fair value of 38 sen per share.
