Order book reached a record high of RM1.2bn (80% from utility-scale solar projects) and we are confident it will exceed RM2bn in the coming quarters. The tender book has also expanded to 8.5GWp, with the majority still originating from the local market.
Near-term job flow momentum is expected to carry on, primarily driven by LSS5 projects. YTD, SLVEST has secured 26.7% market share of LSS5 EPCC opportunities. We believe it will rise to 30% following 500MWac job awards from TNB, showcasing clients’ confidence in SLVEST’s ability to deliver.
SLVEST, through its two qualified consortia, will tender for two BESS projects with a combined capacity of 800MWh, at an estimated project value of up to RM1bn. We have yet to factor in contribution from these projects, but it would serve as an additional earnings growth catalyst.
Maintain BUY recommendation with an unchanged target price of RM2.61, based on a SOP valuation, and appraised with a three-star ESG rating.
We attended SLVEST’s post-results briefing yesterday and came away feeling reassured of its promising outlook. Below are the key takeaways:
Record high earnings in FY25. SLVEST achieved its highest-ever net profit of RM57.2m (+63.2% yoy) in FY25, with a CNP margin of 10.6%. This was driven by greater revenue recognition from CGPP projects (40.8% of total revenue), alongside higher demand in the C&I rooftop solar segment (44.8% of total revenue). Moving forward, the Group expects acceleration of revenue recognition from CGPP projects, which have entered the S-curve accelerated growth phase, and remains confident of maintaining ~RM200m from C&I solar PV installations. Revenue growth is expected to be further supported by the full-year contribution of LSS4 assets (~RM23m) in FY26F and the ongoing Powervest programme, expected to contribute recurring revenue of RM51m per annum within 18 months of COD. In addition, other operating segments are expected to remain robust, supported by two newly acquired associates SIW and Kee Ming (with profit guarantees totalling RM6.9m), and increasing traction in project development and REC trading. The Group expects its net profit margin to maintain at 10.6% recorded in 4QFY24.
Eyeing more EPCC job flow. SLVEST continues to prioritise utility-scale solar projects, which account for 80% of its record high RM1.2bn outstanding order book as of 31 Mar 2025, representing 2.3x its FY25 revenue. Its tender book has expanded significantly to 8.5GWp (from 7.7GWp in 3QFY25), driven by a favourable RE landscape particularly in the local market, which comprises the majority of the tenders. Management is optimistic about securing these contracts from 2QFY26 onward and is confident in securing RM2bn in contract value for FY26F. We believe near-term order replenishment will primarily come from the LSS5 project, which typically materialises within six months of project developer appointment. YTD, SLVEST has secured 26.7% market share of LSS5 EPCC opportunities. We believe it could rise to 30% market share following the recent 500MWac job award from TNB, showcasing clients’ confidence in SLVEST’s ability to deliver.
Exploring BESS opportunities. SLVEST is actively tendering for two major BESS programmes, namely the 400MW/1,600MWh BESS initiative, comprising four 100MW/400MWh projects launched by Malaysia's Ministry of Energy Transition and Water Transformation (PETRA), through the Energy Commission, and TNB’s 400MWh pilot BESS project. The RFP for the BESS projects were announced recently, and SLVEST will tender for two projects with a combined capacity of 800MWh through two of its qualified consortia. Awards are expected by end-2025, with execution anticipated within a 12-month timeframe. These projects are large-scale in nature, with estimated values of up to RM500m each. We are confident in SLVEST’s financial and technical ability to execute these projects, positioning it as a front-runner among a limited pool of qualified contenders. At this juncture, we have yet to factor in any contribution from the BESS program. It would serve as an additional catalyst to earnings growth.
Earnings Revision. We maintain our earnings forecasts for now.
Valuation. We maintain our BUY recommendation with an unchanged TP of RM2.61 based on a SOP valuation and a three-star ESG rating. We believe SLVEST is well-positioned to capitalise on government renewable energy initiatives, thanks to its unique in-house solar financing and its position as Malaysia’s largest solar EPCC player.
Risks. Increase in solar module costs. Heavy reliance on government initiatives. Intense market competition.
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Currency | Buy Rates (RM) | Sell Rates (RM) |
---|---|---|
USD | 4.212042 | 4.248408 |
EUR | 4.921000 | 4.929487 |
CNY | 0.591903 | 0.592919 |
HKD | 0.540309 | 0.544492 |
SGD | 3.268153 | 3.293573 |