KUALA LUMPUR: The energy sector is getting a boost from the government's new Acceleration Package to drive adoption of the Corporate Renewables Energy Supply Scheme (CRESS), with the initiative expediting the signing of CRESS agreements and making the projects move viable, says RHB Research.
In its sector update, the research firm said Samaiden Bhd and Solarvest Holdings Bhd
are the key beneficiaries of the initiative.
It raised its target price on Solarvest to RM4.30 from RM3.64, as it retained its base-case assumption of 300-500MW of CRESS project awards for Solarvest by end-2026, while rolling forward the valuation base year to FY28.
RHB also raised its target price for Samaiden to RM3 after imputing a 100MW orderbook replenishment assumption from CRESS with a 50% battery ratio.
"Supported by a RM3.5bil tenderbook, of which 70% comprises CRESS projects, further job wins could provide upside potential to our new MYR3 target price," it added.
RHB's top sector pick, YTL Power Bhd, is set to benefit from rising DC capacity while it said Tenaga Nasional Bhd is the prime beneficiary of the National Energy Transition Roadmap (NETR), with the regulated framework providing a stable earnings base.
RHB maintained its "overweight" call on the energy sector after the Energy Transition and Water Transformation Ministry (PETRA) said the system access charge (SAC) has been lowered to 14 sen/kWh to improve project bankability and approval process.
There are two key requirements for projects to qualify for the CRESS Acceleration Package. First, projects seeking to benefit from the CRESS Acceleration Package need to sign a minimum 10-year contract with
the offtakers. This is to ensure long-term cost certainty for developers and
financiers.
Secondly, the approved projects have to be commissioned by Dec 31, 2028. If not met, the projects will be subjected to prevailing SAC rates at
that time.
According to RHB, a number of developers are already in the final
stages to sign CRESS agreements with offtakers. It added that a new requirement imposed on data centres to invest in Malaysia includes a 30% renewable energy mix, which coupled with rising grid prices, would encourage more DCs to sign CRESS agreements to lock in long-term green tariffs.
