Solarvest Holdings Berhad - Within Expectations As Utility Execution Drives Growth
Wed, 25-Feb-2026 08:26 am
by Team Coverage • Apex Research

Counter

SLVEST (0215)

Target Price (RM)

3.57

Recommendation

Buy

  • SLVEST’s 3QFY26 CNP of RM22.7m (+11.7% QoQ, +40% YoY) came in within expectations, bringing 9MFY26 CNP to RM59.9m (69% of our forecast; 77% of consensus). We deem the results in line as we expect a stronger 4QFY26 driven by higher billings from CGPP EPCC works and the initial commencement of LSS5 projects.

  • Near-term order book replenishment will likely be supported by LSS5+, as EPCC contracts are typically awarded six to nine months after project developer appointment.

  • Maintain a BUY recommendation with an unchanged TP of RM3.57, based on a SOP valuation and a three-star ESG rating.

 

Broadly inline. After adjusting for forex loss (+RM1.6m), SLVEST’s 3QFY26 core net profit (CNP) is arrived at RM22.7m, bringing 9MFY26 CNP to RM59.9m. This represents 69% of our full-year forecast and 77% of consensus. We deem the results broadly inline with our estimates as the Group enters a period of accelerated revenue recognition from CGPP projects and early-stage execution of the LSS5 pipeline.

 

QoQ. CNP increased by 11.7% from RM20.3m in 2QFY26. The growth was primarily fuelled by large-scale projects, particularly as LSS5 began execution reflected in the increase of revenue (+6.9% QoQ) to RM181.2m. The "Others" segment has emerged as a bright spot with PBT margins soaring to 30.9% from 2.2% in 2QFY26, delivering a 9MFY26 profit of RM3.6m (up from -RM0.4m in 9MFY25) through the gain of project development fees and environmental commodity trading. Furthermore, this JV/associate contribution growth (+314.8%) was aided by the recent acquisition of associate stakes in SDCG and Kee Ming. 

 

YoY. CNP surged by 40% driven by (i) accelerated progress on ongoing CGPP projects compared to 3QFY25; (ii) higher share of results from associates and joint ventures, which contributed RM2.7m in 3QFY26 (3QFY25: -RM0.1m); and (iii) stronger power generation contribution as assets ramped up to stable operating levels. Despite a higher unrealised FX loss of RM1.7m this quarter, the core operations remained healthy and as a result core margin improved by 4.6%-pts to 12.5%.

 

Outlook. We anticipate a robust 4QFY26 as CGPP projects reach peak execution and additional LSS5 contracts are finalized. Management remains confident in mitigating the removal of China’s 9% VAT rebate (effective April 2026), having proactively locked in 2GW of modules in 2H2025. Consequently, only 600MW of the current order book remains exposed, with the remainder protected by pass-through clauses. Furthermore, the strengthening of the Ringgit is expected to minimize any residual cost impact. On the retail front, the introduction of Solar ATAP on 1 January 2026 should sustain the C&I annual revenue run-rate, estimated at c.RM200m.

 

Order book. As of 31 Dec 2025, SLVEST’s unbilled order book stood at RM1.54bn (87% utility; 13% C&I and residential), equivalent to 2.88x its FY25 revenue.

 

Earnings revision. No change to our earnings forecasts.

 

Valuation. Maintain a BUY rating on SLVEST with an unchanged TP of RM3.57, based on a SOP valuation and a three-star ESG rating. We believe SLVEST is well-positioned to capitalise on government renewable energy initiatives like CRESS and ATAP, 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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