PETALING JAYA: Solarvest Holdings Bhd
’s earnings may still see an impact from elevated solar panel costs, given the export tax rebate removal in China and the soft solar industry in China.
Kenanga Research said the 20% decline seen in the group’s share price year-to-date has been caused by the announcement out of China in January 2026, whereby export tax rebate on solar modules will be further cut from 9% to zero by April this year.
Nonetheless, the research house is of the view the 20% slide is “harsh”, as this assumes that pre-procurement arrangement will not be honoured and implies panels needed to be sourced elsewhere at a 10% higher price
“We estimate panels are about 40% to 50% of the cost of goods. Thus, in theory each 1% expansion in solar panel cost could impinge gross profit margin (GPM) by about 0.3 percentage points (ppt).
“Assuming this equation and valuation price-to-earnings ratio multiple hold, the share price decline of about 20% since Jan 9 reveals that this price resulted in about a 10% jump in panel prices being fully absorbed by Solarvest,” it said in a report yesterday.
On the removal of the export tax rebate, Kenanga Research said Chinese manufacturers have been receiving refunds from the government, but as the latter no longer has intention to subsidise exports, prices for overseas importers may rise as it does not expect suppliers to absorb the costs.
Also, aggravating this situation is the recent climb in silver prices.
For now, Kenanga Research said assuming a net rise in solar panel cost from the tax rebate removal, Solarvest’s GPM is affected by 0.4 ppt, which brings overall engineering, procurement, construction and commissioning gross margin to just above 10%, with the assumption the ringgit ends at 3.95 to the dollar in 2026.
Moreover, the research house noted it cannot discount the role of front-loaded purchases ahead of the implementation of the tax rebate removal in driving solar panel prices higher.
“Evidence for this is the fact that while the rebate removal results in a 9% price change potential, market prices per Oil Price Information Service for solar module indicates about 12 US cents per watt for the second quarter of 2026 (2Q26) loading and 3Q26, a steeper jump from about nine US cents per watt seen end of last year,” Kenanga Research said.
At the same time, upstream inputs such as polysilicon had begun recovering in July 2025 and stabilised, per the China Photovoltaic Industry Association.
Efforts by the polysilicon industry to coordinate production capacity, sales, volumes and prices have also drawn regulator concern of monopoly, and may help keep the lid on upstream costs, Kenanga Research said.
Nevertheless, it said it continues to monitor the prices of silver, which is now estimated to make up around 20% of panel cost.
