PETALING JAYA: Cypark Resources Bhd
is gradually clearing key operational and financial hurdles as it works to expand its long-term recurring income base, even as near-term earnings remain pressured by slower-than-expected conversion in its engineering, procurement, construction and commissioning (EPCC) segment.
Maybank Investment Bank Research (Maybank IB) said Cypark remains active in growing its long-term recurring income base through the development of a new large-scale solar five-plus (LSS5+) asset and the planned expansion of its Phase 2 waste-to-energy (WtE) plant, but cautioned that “near-term headwinds remain due to slower EPCC order-book conversion”.
Reflecting these challenges, the research house, in a note to clients yesterday, cut its earnings forecasts for Cypark by between 20% and 143% for the financial year ending April 2026 to 2028 (FY26 to FY28) and lowered its sum-of-parts target price to 69 sen from 88 sen, while maintaining a “hold” call on the stock.
A key positive development for the group is the award of a 100MWac LSS photovoltaic project under the LSS5+ programme.
Cypark, together with Sunview Group Bhd in a 49:51 consortium, secured the quota in September last year and has entered into a 21-year solar power purchase agreement with Tenaga Nasional Bhd.
Commercial operations are scheduled for February 2028, and Maybank IB estimated the project will contribute about RM2mil in profit after tax annually from FY29 onwards for Cypark.
At the same time, the research house observed: “We understand that Cypark is progressing with its SMART WtE Phase 2 expansion, which is currently in the final approval stage.”
Despite these asset-driven positives, the EPCC division remains the key swing factor for near-term performance.
Cypark is targeting higher EPCC contributions to lift earnings, supported by a RM3.5bil tender book that is primarily for large-scale integrated solar and battery energy storage system projects.
However, Maybank IB revised its EPCC revenue forecasts to reflect “longer- than-expected project design finalisation by prospective clients”, cutting FY26 and FY27 estimates before raising FY28 numbers to account for backloaded billing recognition.
To strengthen its balance sheet, Cypark has also made progress on refinancing.
The group fully redeemed its RM235mil Tranche 1 perpetual sukuk in December 2025 as part of a longer-term plan to lower borrowing costs.
According to Maybank IB, this move reduces distributions to perpetual securities by about 43% over FY27 and FY28, while replacing them with cheaper bank borrowings.
Overall, the investment bank said the reduction in its forecasts for Cypark reflects the delayed EPCC revenue recognition timeline and the adoption of a more conservative earnings before interest and tax margin assumption of 12% for the group’s EPCC segment.
While upside risks include faster project recognition and improved execution, the research house believes these factors have yet to materialise meaningfully.
For now, Cypark’s outlook is anchored on its growing portfolio of renewable energy and waste-to-energy assets, balanced against execution risks in its EPCC pipeline.
As Maybank IB noted, the group is making progress on strategic fronts, but earnings recovery will depend on how quickly those opportunities translate into billable work and cash flow.
