The group’s second-quarter net profit doubled year-on-year to RM18.73mil from RM9.2mil in the year-ago quarter.
PETALING JAYA: Clean energy solutions provider Solarvest Holdings Bhd
’s acquisition of a 22% stake in building management systems (BMS) specialist Solar District Cooling Group Bhd (SDCG) for RM42mil, announced on Tuesday, is considered to be on the high side valuation-wise.
Analysts covering Solarvest have different views of the acquisition, with Apex Securities, which has a “buy” call on the stock, viewing the price as fair although high on implied price-to-earnings (PE).
It noted that SDCG’s share price has not traded below 45 sen since listing in September 2024, “suggesting market confidence in its growth prospects and long-term outlook”, given that the acquisition values the shares at 45 sen.
The research house has revised Solarvest’s target price (TP) to RM3.57 from RM3.55.
“Strategically, the acquisition supports technology integration and customer mapping, which is expected to enhance cross-selling opportunities and deepen engagement with existing and new customers,” it said.
“The investment also benefits from BMS-driven recurring and project-based income, including government and data centre-related projects, which supports medium-term earnings visibility,” it added.
Maybank Investment Bank Research, while maintaining a “buy” call on the stock with a TP of RM3.67, considers the acquisition as neutral due to the demanding valuation levels and have maintained earnings forecast, as the near-term earnings accretion remains minimal, pending further clarity on the realisation of business synergies.
It said SDCG’s net profit of RM3.9mil for the nine months ended Sept 30, 2025, translates into a trailing acquisition PE of 36.6 times based on annualised 2025 estimates for net profit of RM5.2mil.
“Based on Solarvest’s 22% associate interest, earnings contribution is estimated at RM1mil to RM2mil, accounting for 1% of our Solarvest financial year ending March 31, 2026 (FY26) to FY28 earnings forecasts,” it added.
“This strategic investment provides Solarvest with an entry into the energy efficiency segment and creates cross selling opportunities across its established commercial and industrial customer base,” it said.
In its second quarter ended Sept 30, 2025, the group’s net profit doubled year-on-year to RM18.73mil from RM9.2mil in the year-ago quarter.
Earnings per share rose to 2.34 sen from 1.31 sen previously.
Quarterly revenue gained to RM169.47mil from RM103.91mil, driven by the ongoing execution of several utility-scale solar projects under the government’s Corporate Green Power Programme, as compared to the year-ago quarter when the Large Scale Solar 4 projects were nearing completion with less contribution.
For the six-month period to Sept 30, 2025, Solarvest’s net profit was RM34.61mil, twice the net profit of RM17.04mil in the same period in the previous year.
This came on the back of revenue of RM307.21mil, up from RM176.56mil in the previous corresponding period.
Apart from the higher revenue, Solarvest said the higher net profit was also owing to improved margin contributions from projects nearing completion.
As of Sept 30, 2025, the group’s unbilled order book stood at RM1.33bil, which will be progressively recognised in FY26 and FY27.
