Earnings improvement expected in FY26, from (i) conversion of RM711m order book, (ii) accelerated recognition from two CGPP projects, and (iii) execution of LSS5.
Recurring income proportion projected to increase to about 3-4% in FY26 (from <1% currently), keeping the pathway to 10% by 2027 intact.
We have revised our earnings forecasts upward by 16.7% and 2.9% for FY26F and FY27F respectively, reflecting accelerated revenue recognition from CGPP and LSS projects.
Maintain BUY recommendation with revised target price of RM1.45 (from 1.40), based on sum-of-parts (SOP) valuation, and appraised with three-star ESG rating.
We attended SAMAIDEN’s post-results briefing recently and below are the key takeaways:
Earnings set to improve in FY26 from (i) conversion of RM711m order book (2.0x FY25 revenue), (ii) accelerated recognition from two CGPP projects (RM91.2m total), and (iii) execution of LSS5. Within EPCC, near-term support will come from accelerated recognition of the two CGPP projects (RM91.2m total), with LSS5 scheduled to progress from 2QFY26 onwards, driving earnings growth. EPCC mix is also expected to tilt toward higher-margin rooftop solar projects, driven by a front-loaded SELCO programme through end-2025. Furthermore, the commencement of CGPP projects by end-2025 is expected to support earnings through electricity sales, lifting recurring income to ~3-4% in FY26 (from <1%) and keeping the Group on track to achieve its 10% recurring contribution target by 2027.
The tender funnel has expanded to c.RM2.5bn (from RM1.5-1.8bn previously), indicating robust order replenishment. Near-term EPCC awards are likely to be driven by LSS5 and LSS5+, where SAMAIDEN is aiming for a 20% market share in each scheme. To date, the Group has already secured 11.6% market share in LSS5 and 5% in LSS5+. We believe this internal target remains attainable, underpinned by SAMAIDEN’s proven track record in utility-scale solar and its strong balance sheet with a net cash position. The outlook under CRESS is also constructive as solar interest has reaccelerated following the SAC reduction from RM0.25/kWh to RM0.20/kWh. Management reports more than ten re-engaged offtakers representing about 300MWac as pricing narrows, making CRESS more competitive relative to GET.
Costs remain under close watch. China’s recent anti-involution backdrop has pushed solar module prices about 10% higher and kept volatility elevated, pressuring EPCC margins across the industry. We believe the impact on SAMAIDEN remains manageable, given its strong cash flow position, which enables bulk procurement of solar panels and should partially cushion the cost increase. Meanwhile, battery costs have declined by 47% from their peak to c.USD160/kWh, or c.RM675/kWh (based on RM4.22/USD as of 5 Sep 2025). This reduction lowers BESS capital costs and is expected to unlock additional demand under SELCO and CRESS, where BESS is increasingly a requirement.
Earnings revision. We have revised our earnings forecasts upward by 16.7% and 2.9% for FY26F and FY27F respectively, primarily reflecting accelerated revenue recognition from CGPP and LSS projects. We have also made housekeeping adjustments.
Valuation & Recommendation. Following our earnings revision, we raise our TP to RM1.45 (from RM1.40), based on a sum-of-parts (SOP) valuation and incorporating a three-star ESG rating. Maintain BUY. We continue to favour SAMAIDEN for its (i) expertise in ground-mounted solar PV projects, (ii) industry-leading low gearing with a net cash position as of 4QFY25, and (iii) strategic focus on bioenergy solutions, which sets it apart from other solar EPCC players.
Risks. Increase in solar module costs. Inability to complete projects in time. Intense market competition.
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Currency | Buy Rates (RM) | Sell Rates (RM) |
---|---|---|
USD | 4.189564 | 4.225840 |
EUR | 4.930937 | 4.944344 |
CNY | 0.590125 | 0.591709 |
HKD | 0.538841 | 0.543525 |
SGD | 3.269557 | 3.298024 |