Maybank IB Research was adjusting its FY26 estimated earnings lower by 0.1% to account for the finance cost.
PETALING JAYA: Analysts are positive about Pekat Group Bhd
’s power purchase agreement (PPA) to build and operate a solar and battery energy storage systems (BESS) in Kuantan, Pahang, saying it will provide a boost to the company’s earnings from financial year 2027 (FY27).
Maybank Investment Bank (Maybank IB) Research expected the project to contribute a RM4.3mil annual profit after tax to Pekat from FY27, with a minor one to two months contribution in FY26, implying a potential equity internal rate of return of 19%.
“We anticipate a further potential income stream from the energy performance contract, driven by maximum demand charge savings enabled by the BESS component which is at an advanced finalisation stage.
“We estimate the project would require an investment cost of RM88mil and we expect Pekat to fund it with a 80:20 debt-equity structure. The group estimates the project to generate RM239mil revenue over the project period, which translates to an assumed tariff rate of 25 sen to 27 sen per kilowatt-hour,“ it noted.
Maybank IB Research was adjusting its FY26 estimated earnings lower by 0.1% to account for the finance cost and raising its FY27 forecast by 6.8% to account for the full year contribution of this asset.
The research house has maintained its “buy” call with a higher sum-of-parts-based target price RM2 from RM1.98 previously.
Pekat has entered into a PPA with an industrial energy off-taker to design, build, own, operate and transfer a 25MW alternating current self-consumption solar photovoltaic (PV) facility, integrated with a BESS of 40MW-hour in Kuantan.
The project will be implemented over a 21-year term from the commercial operation date, which is targeted for October 2026.
The industrial offtaker is principally engaged in heavy industrial manufacturing and provision of transportation services.
Meanwhile, Phillip Capital Research said it was reiterating its “buy” call and 12-month sum-of-parts-derived target price at RM1.90.
“We remain positive on Pekat’s earnings prospects as it continues to benefit from Malaysia’s renewable energy initiatives.
“However, key downside risks include project execution delays, intense market competition and volatility in solar PV panel prices,” the research house added.
