Solarvest Holdings Berhad - Wins RM171.7m EPCC Contracts Under LSS5
Tue, 16-Dec-2025 07:45 am
by Tan Sue Wen • Apex Research

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SLVEST (0215)

Target Price (RM)

3.55

Recommendation

Buy

  • SLVEST has secured additional EPCC contracts worth RM171.7m for 56.5MWac of LSS5 solar projects, lifting its order book to RM1.8bn, equivalent to 3.4x FY25 revenue. This raises LSS5 EPCC market share to 34.3%, well above its historical average of ~20%.

  • Near-term job flow momentum is expected to be driven by LSS5+, where EPCC awards typically materialise 6-8 months after developers achieve financial close. Based on our estimates, the unallocated LSS5+ pipeline could offer RM4-5bn in EPCC opportunities, supporting medium-term order book visibility.

  • Maintain a BUY recommendation with an unchanged TP of RM3.55, based on a SOP valuation and a three-star ESG rating.

 

56.5MWac EPCC Contracts (LSS5). On 15 December 2025, Binastra Atlantic Sdn. Bhd., a 49%-owned associate of Solarvest Holdings Berhad via Atlantic Blue Sdn. Bhd., accepted three Letters of Award (LOA) from Maya Jaya Sdn. Bhd. for the engineering, procurement, construction and commissioning (EPCC) of three LSS5 projects. The projects have a combined capacity of 56.5MWac and a total contract value of RM171.7m, comprising (i) MJ1 (29.99MWac; RM93.3m) in Kuala Langat, Selangor, (ii) MJ2 (10.00MWac; RM28.5m) and (iii) MJ3 (16.55MWac; RM49.9m) in Kuala Muda, Kedah. All projects targeted to achieve commercial operation by 26 June 2027, subject to the execution of the final EPCC contracts.

Our Take. We view the contract positively, as it marks SLVEST’s fourth EPCC job win under LSS5, further strengthening earnings visibility through FY28. Based on a 5% PBT margin and a six-month financial close assumption, the RM171.7m contract is expected to generate c.RM8.6m in cumulative PBT over the ~13-month effective construction period beginning June 2026. (7.3% of our FY26F PBT). We do not foresee major execution risks, underpinned by SLVEST’s established track record in utility-scale solar projects. Following this win, SLVEST’s unbilled order book rises to RM1.8bn, equivalent to 3.4x FY25 revenue, providing healthy earnings visibility over the next three years.

Outlook. With this award, SLVEST’s LSS5 EPCC market share rises to 34.3%, well above its historical average of around 20%. The Group has now secured an estimated RM1.1bn in LSS5 EPCC contracts, accounting for 68% of its total order book. Looking ahead, near-term order book replenishment is expected to be driven by LSS5+, where EPCC awards typically follow 6-8 months after developers achieve financial close. Based on our estimates, the unallocated LSS5+ pipeline could represent RM4-5bn of EPCC opportunities, underpinning SLVEST’s near-term order book growth prospects. We remain confident that SLVEST can secure a comparable market share in LSS5+ (currently 23.5%) to that achieved under LSS5, supported by its strong execution track record.

Earnings revision. No changes to our earnings forecasts, as the FY26 YTD announced contract win of RM2.4bn falls within our order book replenishment assumption of RM2.5bn.

Valuation. Maintain a BUY rating on SLVEST with an unchanged TP of RM3.55, 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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