Samaiden Group Berhad - Growth Outlook Intact
Mon, 19-May-2025 07:32 am
by Tan Sue Wen • Apex Research

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SAMAIDEN (0223)

Target Price (RM)

1.71

Recommendation

Buy

  • Samaiden secured a RM108.6m EPCC contract for a 29.99MWac solar PV project under LSS5, spanning eight months with completion by 15 January 2026.

  • On the same day, it announced the mutual termination of a 10MWac biomass project valued at RM115.6m, due to the loss of banking facilities. Overall, we estimate Samaiden’s unbilled orderbook at ~RM508.7m, representing 2.2x FY2024 revenue.

  • We believe orderbook replenishment prospects remains strong, with ~170MWac in LSS5 EPCC opportunities remaining to meet its 10% (200MWac) target. Supported by the award of a 99.99MWac solar project under LSS5 as a project developer in late 2024, we view this target as readily achievable.

  • Reaffirmed BUY recommendation with unchanged target price of RM1.71, based on sum-of-parts (SOP) valuation, and appraised with three-star ESG rating.

 

LSS win. Samaiden has secured an EPCC contract valued at RM108.6m from Customer A for a 29.99MWac large-scale solar photovoltaic (LSSPV) project in the Central Region of Peninsular Malaysia. The project, part of the Large-Scale Solar 5 (LSS5) programme under Category 2 (10MWac to <30MWac), is set to take eight months, with completion by targeted by 15 January 2026.

 

Our Take. We view the contract positively, as it should sustain Samaiden’s earnings growth through FY26F. Assuming an 8% PBT margin, this could yield an annual PBT of RM8.7m, representing 32.8% of our forecasted Group PBT in FY25F. The contract is likely to drive most earnings recognition in FY26F based on its timeline.

 

Termination of LOA. On the same day, Samaiden announced the mutual termination of a 10MWac biomass project valued at RM115.6m, originally awarded by BTM Resources for a biomass power plant in Teluk Kalong, Terengganu. The termination was due to the loss of banking facilities. To recap, the project was a RM115.6m EPCC project announced in Nov 2020. We view this as negative, as the termination would reduce Samaiden’s orderbook by 22.4%. After factoring in recent contract wins and the removal of this project, we estimate Samaiden’s unbilled orderbook at ~RM508.7m, equivalent to 2.2x FY2024 revenue, ensuring earnings visibility for the next 2 years. 

 

Outlook. We expect Samaiden’s orderbook replenishment to stay strong, driven by LSS5 contracts, which typically materialises within 6 months of project developer appointment. Samaiden aims to secure 10%, or 200MWac, of the 2GWac EPCC opportunities under LSS5, translating into ~RM600m in potential contract value. Including the recently secured 29.99MWac project, Samaiden’s remaining LSS5 target is ~170MWac, which we believe is readily achievable, given that Samaiden had already secured a 99.99MWac solar project under package 3 of LSS5 as a project developer in December 2024.

 

Earnings revision. Earnings forecasts remain unchanged, as the latest job win falls within our FY25F orderbook replenishment assumption of ~RM650m. Additionally, we had not factored in the 10MWac biomass project into our earnings forecasts, as the project had seen limited progress since its award.

 

Valuation & Recommendation. We maintain our BUY recommendation with an unchanged TP of RM1.71 based on sum-of-parts (SOP) and appraised with three-star ESG rating. We favour Samaiden for its (i) expertise in ground-mounted solar PV projects, (ii) industry-leading low gearing ratio of 0.12x as of 2QFY25, and (iii) strategic focus on bioenergy solutions, which sets it apart from other solar EPCC players.

 

Risk. Increase in solar module costs. Inability to complete projects in time. Intense market competition.

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