PETALING JAYA: Wasco Greenergy Bhd
outperformed in its fourth quarter financial year 2025 (4Q25), exceeding analysts’ financial year 2025 (FY25) full-year expectations.
Maybank Investment Bank Research (Maybank IB) said: “The company’s core net profits of RM10mil brought FY25 core earnings to RM29.3mil, reflecting a 27% increase year-on-year (y-o-y).”
According to Maybank IB, the renewable energy arm of Wasco Bhd have upbeat expectations due to an underlying variance of stronger-than-expected gross profit margins of 29.2% in FY25, due to better cost management and improved efficiencies.
The research house also said Wasco Greenergy’s outstanding order book stands at RM241.3mil, as at end of financial period December 2025.
“This will provide some near-term revenue and earnings visibility and we expect more than 90% (RM223mil) of this amount to be recognised in FY26, minimising downside risks to our forecasts,” it said.
Maybank IB noted that with Wasco Greenergy trading at a FY26 price-to-earnings ratio of 10.6 multiple, investors gain direct exposure to the expanding renewable energy sector.
“Budget 2026 has also announced plans to introduce another 300 megawatt of quota for bio-energy and hydro projects under FiT2.0,” Maybank IB added.
It pointed out that the development could further raise Wasco Greenergy’s total addressable market for biomass engineering, procurement, construction, and commissioning projects.
Wasco Greenergy currently leads the steam turbine generator market, with 17% share in Malaysia and 22% in Indonesia.
The company is also the second largest player in Malaysia’s biomass boiler market, commanding a 14% market share.
In Malaysia, the biomass boiler and steam turbine markets are projected to grow at a compounded annual growth rates of of 9% and 8.1%, respectively, from 2024 to 2029, according to the research house.
Driven by palm oil plants and factories adopting green solutions to meet decarbonisation targets, Maybank IB said this is expected to accelerate decarbonisation in Malaysia and Indonesia’s palm oil sector.
In turn, Maybank IB highlighted the potential upside for Wasco Greenergy, citing faster-than-expected project recognition and expedited completion of its renewable energy asset pipeline.
However, the research house pointed out potential execution risks of project delays that could affect recognition timing, and lower than expected order book replenishment.
Besides that, Maybank IB highlighted a minimal adjustment of less than 1% to Wasco Greenergy FY26 to FY27 earnings forecasts, thereby introducing FY28 estimates.
“Our earnings per share growth in FY26 to FY27 is underpinned by an upcycle in biomass boilers via a spillover from the successful FiT bidders and continued industry drive towards decarbonisation which would drive order book replenishments,” Maybank IB explained.
On the other hand, Wasco Greenergy declared a dividend per share of two sen, surpassing Maybank IB’s forecasts of 1.4 sen at 30% payout ratio
However, Maybank IB maintained assumptions of a 30% payout ratio in FY26 to FY28, holding firm on its conservative stance. Maybank IB reaffirmed its “buy” call on Wasco Greenergy, maintaining an 85 sen target price based on FY26’s earnings per share.
