Solarvest Holdings Berhad - Private Placement for up to RM254.1m
Wed, 22-Oct-2025 07:41 am
by Tan Sue Wen • Apex Research

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SLVEST (0215)

Target Price (RM)

3.55

Recommendation

Buy

  • SLVEST has proposed a private placement of up to 84.7m new shares, representing 10% of its existing share base. Based on an indicative issue price of RM3.00/share, the placement is expected to raise gross proceeds of RM254.1m. 

  • The proceeds will be utilised mainly for solar project CAPEX (49%), debt repayment (20%), and working capital (31%) to support ongoing and upcoming LSS5, LSS5+, and CGPP projects.

  • We are positive on the development, as the exercise will strengthen the Group’s balance sheet and enhance capacity to secure larger utility-scale solar projects. Nevertheless, the placement is expected to dilute FY27F EPS by about 8.4%, implying a fully diluted fair value of RM3.09/share.

  • Earnings forecasts have been revised upward by 1.5% and 3.3% for FY26F and FY27F, respectively, following higher order book assumptions supported by improved financing capacity and stronger tender prospects in the solar segment. 

  • Maintain BUY with a higher TP of RM3.55 (from RM3.41), based on a SOP valuation and a three-star ESG rating.

 

Proposed Placement. SLVEST has proposed a private placement of up to 84.7m new shares, representing 10% of its enlarged share capital based on existing issued share capital of 847.7m shares. The issue price will be determined later, at a discount of no more than 10% to the 5-day VWAP prior to price fixing. The placement is expected to be completed in 1HCY26 and may be executed in one or multiple tranches.

 

Based on an indicative issue price of RM3.00/share, the proposed placement is expected to raise up to RM254.1m. Of this, RM124.6m (49%) will be earmarked for CAPEX on solar PV projects, comprising RM30.0m for the 60MWac LSS5 facility in Kuala Langat, RM49.0m for the 470MWac LSS5+ project in Larut & Matang, and RM45.6m for the 100MWac Mukah Solar Project.In addition, RM50.0m (20%) will be allocated for the repayment of borrowings, specifically the Group’s IMTN which will mature in September 2026, while RM79.2m (31%) will fund working-capital requirements, mainly for solar module procurement and subcontractor payments. The remaining RM0.3m is set aside for placement-related expenses.

 

The rationale of the exercise is to strengthen SLVEST’s capital base and fund renewable energy expansion without incurring additional interest expense of RM2.8m. Upon completion, the private placement is expected to reduce gearing from 0.69x to 0.38x, thereby enhancing liquidity and financial flexibility ahead of the rollout of new LSS5+ and Corporate Green Power Programme (CGPP) projects.

 

Our Take. We are positive on the proposed placement. While the issuance will strengthen SLVEST’s balance sheet through debt reduction, it will also result in an estimated 8.4% dilution to FY27F EPS under the fully diluted scenario, after accounting for the conversion of 20.7m outstanding warrants and 59.2m ESOS options. This implies a fully diluted fair value of RM3.09/share. The placement also reflects management’s readiness to capitalise on upcoming utility-scale solar projects, which should reinforce SLVEST’s growth trajectory over the medium term.

 

Earnings revision. We have raised our FY26F solar order book assumption to RM2.5bn (from RM2.4bn) following the proposed private placement, which is expected to enhance financing capacity and enable the Group to secure larger utility-scale solar projects. For FY27F, we maintain our order book replenishment forecast at RM2.2bn, as most resources are likely to be channelled toward executing existing projects. As a result, FY26F and FY27F earnings forecasts have been revised upward by 1.5% and 3.3%, respectively. The impact of the private placement is maintained pending determination of the issue price and completion of the exercise.

 

Valuation. We maintain our BUY recommendation with a higher TP of RM3.55 (from RM3.41), alongside a three-star ESG rating. SLVEST remains well-positioned to capitalise on government-led renewable energy initiatives, supported by its in-house solar financing capability and its standing 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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