Samaiden Group Berhad - Within Expectations
Fri, 14-Nov-2025 07:45 am
by Tan Sue Wen • Apex Research

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SAMAIDEN (0223)

Target Price (RM)

1.42

Recommendation

Hold

  • 1QFY26 CNP came in at RM5.1m (-46.1% QoQ, +31.6% YoY), broadly within expectations at 22% of our full-year forecast but below expectations at 19% of consensus.

  • We expect earnings to improve in the coming quarters as more utility-scale projects enter the accelerated phase of revenue recognition.

  • Near-term order book replenishment is expected to remain centred on LSS5+, where we believe the Group could replicate its estimated 18.3% market share achieved under LSS5.

  • Following the recent rally in share price, downgrade to HOLD (from BUY) with a revised TP of RM1.42 (from RM1.45) after updating Annual Report figures, primarily due to warrant dilution, based on sum-of-parts valuation with a three-star ESG rating.

 

Within Expectations. Excluding the fair value gain on short-term investments (-RM1.1m), 1QFY26 core net profit (CNP) came in at RM5.1m, which is deemed within our expectations at 22% of our full-year forecast, but below expectations at the consensus level at 19%. A first interim dividend of 1.4 sen/share was declared (1QFY25: 1.5 sen/share).

 

QoQ. 1QFY26 CNP fell 46.1% to RM5.1m, mainly due to: (i) most utility-scale solar EPCC projects remained in the early stage of the S-curve with thinner margins and (ii) a higher effective tax rate of 33.7% (vs 15.6% in 4QFY25), largely because several subsidiaries and the associate were loss-making. Finance costs also increased sharply in tandem with higher drawdowns of borrowings, particularly the IMTN and term loans, to support ongoing utility-scale projects. Consequently, CNP margin contracted by 1.2 ppts to 5.8%.

         

YoY. 1QFY26 CNP surged 31.6% to RM5.1m, mainly driven by stronger project execution, particularly from larger project volumes in utility-scale EPCC works compared to the same period last year. Despite this, CNP margin contracted 2.1 ppts to 5.8%, weighed down by a higher effective tax rate, as mentioned in the QoQ comparison above.

 

Outlook. We expect earnings to improve in the coming quarters as more utility-scale projects enter the accelerated phase of revenue recognition. Near-term order book replenishment is likely to remain centred on LSS5+, where EPCC contracts are typically awarded to contractors 6 to 9 months after developers achieve financial close. To recap, SAMAIDEN previously secured a total of RM435.7m in EPCC contracts under LSS5, capturing c.18.3% market share. We believe a similar market share is achievable in LSS5+ (from current market share of c.5%), supported by the Group’s proven track record and ample financing headroom, with c.RM1.4bn remaining under the Sukuk Wakalah facility. Meanwhile, module prices have seen short-term fluctuations following China’s tightened energy-intensity control measures, which have led to factory shutdowns across parts of the supply chain. In our view, the industry still requires more time to consolidate, as major manufacturers have reported steep losses in recent quarters. The continued weakening of the USD should also help keep the near-term impact on fixed-cost EPCC arrangements manageable. Based on our checks, panel prices are holding at around USD0.09/W.

 

Order Book. As of 30 Sept 2025, the Group’s order book stood at RM617.5m, equivalent to 1.8x FY25 revenue, providing earnings visibility over the next two years.

 

Earnings revision. No changes to our earnings forecasts. We have made housekeeping adjustments, including updating our FY25 figures based on the latest Annual Report.

 

Valuation & Recommendation. Following the recent share price rally, we downgrade to HOLD (from BUY) and revise our TP to RM1.42 (from RM1.45) after incorporating updates from the latest Annual Report, mainly warrant dilution, based on SOP valuation framework with a three-star ESG rating. 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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