PETALING JAYA: Pekat Group Bhd
’s latest contract variation for a large-scale solar (LSS) project in Kulai, Johor, has been identified as phase two of an existing development, with Kenanga Research saying Pekat is well-positioned to secure additional contracts in future phases.
Recently, Pekat announced that it secured a RM101mil contract variation, increasing the contract sum from RM85.7mil to RM186.5mil for an LSS facility for an undisclosed client.
The variation follows supplemental agreements involving additional works, resulting in an increase in capacity from 63 megawatt alternating current (MWac) to 135MWac.
Kenanga Research said this extension refers to “phase two of the existing project”, which is estimated to carry a duration of four months.
“With total project capacity estimated at 500MW based on our channel checks, more phases could be in the pipeline.”
Kenanga Research said it views this as a positive development for Pekat, as it supports earnings growth through the financial year ending Dec 31, 2026 (FY26).
“Assuming a pre-tax profit margin of 8%, this additional contract valued at RM101mil could contribute incremental pre-tax profit of RM8mil, bringing the total project pre-tax profit contribution to RM15mil, representing 9% of our forecast pre-tax profit for FY26,” it said.
Kenanga Research kept an “outperform” call with a target price of RM1.91, and its earnings estimates unchanged as the job replenishment is within expectations.
