Samaiden Group Berhad - Another LSS Job In The Pocket
Tue, 01-Oct-2024 07:15 am
by Tan Sue Wen • Apex Research

Counter

SAMAIDEN (0223)

Target Price (RM)

1.66

Recommendation

Buy

Summary

  • Secured a RM52m LSS contract for a 14MW solar project from Legasi Green Power, with the project set to commence within 12 months from the LOA date.

  • This new contract win bumps Samaiden’s outstanding order book to RM365.5m, representing an orderbook-to-cover ratio of 1.6x against FY24 revenue of RM227.2m.

  • We maintain our BUY recommendation with an unchanged target price of RM1.66, based on a SOP valuation.

 

Company Update

 

  • New contract secured. Samaiden has secured a Letter of Award from Legasi Green Power for the development of a 14MW large-scale solar project under the Large Scale Solar Photovoltaic (LSS) programme.

 

  • Contract details. The 14MW project, valued at RM52m, will be located in Sungai Petani, Kedah. The project is expected to commence within 12 months from the LOA date, with a target COD by August 2025, assuming no delay. The project also includes a defects liability period of 36 months from the COD, as approved by TNB and ST.

 

  • Orderbook update. This latest contract win bumps Samaiden’s outstanding order book to RM365.5m, representing an orderbook-to-cover ratio of 1.6x against FY24 revenue of RM227.2m. We anticipate the revenue will be recognised in phases, with one-third recognised in FY25, and the remaining revenue likely to be recognised gradually through FY26, in line with the expected COD in Q1FY26. Based on an estimated EBIT margin of 6%, the project is expected to contribute RM3.1m in EBIT over its lifecycle.

 

  • Earnings revision. No changes have been made to our earnings forecasts, as the contract win falls within our FY25F order book replenishment target of RM1.0bn.

 

  • Valuation. We maintain our BUY recommendation for Samaiden with an unchanged target price of RM1.66, based on SOP valuations. We remain optimistic about Samaiden’s prospects due to (i) its expertise in ground-mounted solar PV projects, (ii) its lowest gearing ratio (0.05x as of FY24) among listed peers, and (iii) its focus on bioenergy solutions, which differentiates it from other solar EPCC players.

 

  • Risk. Reversal in solar module costs. Heavy reliance on government initiatives. Intense market competition.

Read more details in:

Disclaimer

The report is for internal and private circulation only and shall not be reproduced either in part or otherwise without the prior written consent of Apex Securities Berhad. The opinions and information contained herein are based on available data believed to be reliable. It is not to be construed as an offer, invitation or solicitation to buy or sell the securities covered by this report.

Opinions, estimates and projections in this report constitute the current judgment of the author. They do not necessarily reflect the opinion of Apex Securities Berhad and are subject to change without notice. Apex Securities Berhad has no obligation to update, modify or amend this report or to otherwise notify a reader thereof in the event that any matter stated herein, or any opinion, projection, forecast or estimate set forth herein, changes or subsequently becomes inaccurate.

Apex Securities Berhad does not warrant the accuracy of anything stated herein in any manner whatsoever and no reliance upon such statement by anyone shall give rise to any claim whatsoever against Apex Securities Berhad. Apex Securities Berhad may from time to time have an interest in the company mentioned by this report. This report may not be reproduced, copied or circulated without the prior written approval of Apex Securities Berhad.

Market Mover
Settlement Rates
Currency Buy Rates (RM) Sell Rates (RM)
USD 4.449296 4.484012
EUR 4.692599 4.701308
CNY 0.615732 0.616932
HKD 0.571606 0.576092
SGD 3.310067 3.336427