Apex Research said Solarvest’s order book rose to RM1.8bil, equivalent to 3.4 times FY25 revenue, providing earnings visibility over the next three years.
PETALING JAYA: Solarvest Holdings Bhd
is expected to strengthen its position as a leading engineering, procurement, construction and commissioning (EPCC) player in Malaysia’s solar space following its latest contract win, worth a total RM171.7mil.
Binastra Atlantic, a joint venture between Binastra Corp (51%) and Solarvest (49%), secured letters of award for three solar farm projects totalling 56.54 megawatt alternating current under LSS5. The project is expected to be completed by June 2027.
The job win, in relation to projects under the fifth phase of the government’s Large Scale solar (LSS5) initiative, is seen as reinforcing medium-term earnings visibility and supporting sustained order book growth beyond its current financial year ending March 31, 2026 (FY26).
Apex Research said: “We view the contract positively, as it marks Solarvest’s fourth EPCC job win under LSS5, further strengthening earnings visibility through FY28.”
The research house noted that based on a 5% profit margin before tax and a six-month financial-close assumption, the RM171.7mil contract is expected to generate about RM8.6mil in cumulative profit before tax over the roughly 13-month effective construction period beginning June 2026, representing 7.3% of its FY27 forecast profit before tax.
“We do not foresee major execution risks, underpinned by Solarvest’s established track record in utility-scale solar projects,” it stated.
Following the award, Solarvest’s order book rose to RM1.8bil, equivalent to 3.4 times FY25 revenue, providing earnings visibility over the next three years, it added.
Apex Research highlighted that with the win, Solarvest’s LSS5 EPCC market share had increased to 34.3%, well above its historical average of around 20%, with an estimated RM1.1bil of LSS5 EPCC contracts now secured, accounting for 68% of its total order book. The research house said near-term replenishment was also likely to be driven by LSS5+.
“Based on our estimates, the unallocated LSS5+ pipeline could represent RM4bil to RM5bil of EPCC opportunities, underpinning Solarvest’s near-term order book growth prospects.”
Apex Research maintained its “buy” rating on the counter, with an unchanged target price of RM3.55.
Meanwhile, Kenanga Research said its forecasts remained unchanged as it had already baked in Solarvest securing at least 30% from the combined potential of about RM10bil from LSS5 and LSS5+ projects.
The research house stated that the award of effectively RM84mil, about three quarters of its LSS5 and LSS5+ EPCC awards forecast of RM3bil had been secured.
Kenanga Research maintained an “outperform” rating on Solarvest, with an unchanged target price of RM3.45.
Maybank Investment Bank Research said the EPCC contracts, worth RM171.7mil in relation to three projects under LSS5, would increase Solarvest’s effective order book to RM1.7bil, and reiterated its “buy” call with a sum-of-the-parts target price of RM3.67, implying 31 times FY27 earnings.
