PETALING JAYA: SD Guthrie Bhd
’s latest 680 megawatt-alternating (MWac) corporate renewable energy supply scheme (Cress) project is strategically significant as the group moves its renewable energy (RE) business toward a large-scale, long-term contracted asset, analysts say.
The project via SD Guthrie’s 33.5%-owned G3nerasi Kinta Sdn Bhd joint-venture (JV) with Gentari Renewables Sdn Bhd and Gamuda Bhd involves a 21-year bilateral energy supply contract with a United States-based multinational technology company to supply renewable electricity to its data centres or DCs, with a 680MWac solar plant.
In a note to clients, Phillip Capital Research said the project provides tangible visibility on the potential scale of SD Guthrie’s energy business, with about RM10bil in gross revenue over 21 years, equivalent to RM476mil annually at project level.
Based on SD Guthrie’s 33.5% effective interest, this implies RM159mil of annualised revenue attributable to its JV interest, or over RM3.35bil cumulatively over the contract tenure.
On SD Guthrie’s proposed disposal of 556.96 acres of freehold land in Kulai, Johor, to Sime Darby Property Bhd for RM418.5mil, Phillip Capital Research viewed this positively, as “the RM17.25 per sq ft disposal price is 8.35% above the RM15.92 per sq ft appraised value”.
The research house noted the disposal is expected to generate a RM373.4mil net gain, targeted for recognition upon completion in the second quarter of financial year 2027.
The proceeds will mainly repay RM374.1mil in debt, saving about RM9.5mil in annual interest and improving gearing from 0.24 times to 0.22 times.
It maintained a “buy” call on SD Guthrie with an unchanged target price of RM7.70.
Meanwhile, CIMB Research in its report said the new project could generate an average revenue of at least RM476mil per annum based on the stated gross revenue of over RM10bil across 21 years.
“Based on our working assumption of a 20% net profit margin, we estimate a project-level net profit of RM95mil per year, translating into RM32mil per annum attributable to SD Guthrie based on its 33.5% stake,” the research house said.
CIMB Research, which is mildly positive on the latest deal, also said this allows SD Guthrie to unlock value from its land and recurring renewable energy income, while leveraging the respective capabilities of Gamuda and Gentari.
It has kept a “hold” call on the stock with an unchanged target price of RM6.86 per share.
For MBSB Research, the latest deal combines SD Guthrie’s sizeable landbank with Gamuda and Gentari’s energy expertise, thus strengthening project execution and providing tangible visibility on scaling the group’s RE business while rewarding long-term recurring earnings.
“Through Cress and its partnership with Gamuda and Gentari, SD Guthrie is moving into co-developing, owning and operating utility-scale solar assets, broadening its earnings base beyond land rentals,” MBSB Research noted.
The research house, which maintained a “buy” call at a target price of RM7.65, said it remains positive on SD Guthrie’s third growth engine prospects.
