2QFY26 CNP came in at RM8.0m (55.1% QoQ, +100.8% YoY), bringing 6MFY26 CNP to RM13.1m (+66.5% YoY), which firmly exceed our expectations, accounting for 56% of our forecasts and 49% of consensus estimates.
The outperformance reflects the transition from 1QFY26’s setup phase to accelerated S-curve recognition, bolstered by tax normalization and a higher margin project mix.
We raise our earnings forecasts by 13.2%, 11.5%, and 8.4% for FY26F-FY28F, respectively, to reflect structurally improved EPCC margins driven by operational efficiencies and a resilient Ringgit.
Upgrade to BUY (from HOLD) with a higher TP of RM1.55 (from RM1.42). We believe the current valuation offers an attractive entry point as the Group leverages its RM1.4bn Sukuk headroom to aggressively target a historical 18.3% market share in upcoming LSS5+ awards.
Exceed Expectations. Stripping out a RM1.1m fair value gain on short-term investments, 2QFY26 core net profit (CNP) rose to RM8.0m (+55.1% QoQ, +100.8% YoY). This brought 6MFY26 CNP to RM13.1m (+66.5% YoY), firmly exceeding our expectations by accounting for 56% of our full-year forecast and 49% of consensus estimates. The outperformance was primarily driven by accelerated progress and stronger revenue recognition from utility-scale solar EPCC projects, alongside a more favourable project margin mix.
QoQ. 2QFY26 CNP surged 55.1% to RM8.0m, significantly outpacing revenue growth of 16.7%. The margin expansion was primarily driven by: (i) improved economies of scale and a better project mix as major utility-scale EPCC works moved past their initial low-margin setup phases, and (ii) a lower effective tax rate of 16.5% (vs. 33.7% in 1QFY26), supported by tax-exempt investment income. This brought the 6MFY26 effective tax rate to 24.4%, normalizing toward statutory levels. Accordingly, CNP margin improved by 2.0 ppts to 7.8% from the preceding quarter.
YoY. 2QFY26 CNP doubled (+100.8%) to RM8.0m (2QFY25: RM4.0m), supported by a 28.4% growth in revenue to RM102.8m. The significant earnings jump reflects the effective conversion of the Group's robust order book. Additionally, with the shift in project mix towards larger utility-scale projects from the prior year’s focus on smaller C&I (Commercial & Industrial) projects, has structurally enhanced the Group’s earnings profile.
Outlook. We anticipate sequential strength in 3QFY26, driven by the sustained execution of current utility-scale projects and peak revenue/margin recognition from CGPP works entering mid-to-late construction, alongside an increasing contribution from the 95MWac LSS5 project in Perak. Beyond the immediate quarter, order book replenishment remains the primary catalyst; the Group is well-positioned to leverage its RM1.4bn Sukuk Wakalah headroom to aggressively pursue both EPCC contracts and asset ownership roles, targeting its historical 18.3% market share in upcoming LSS5+ awards. Additionally, more stable solar module prices (~USD0.10/W) and a favourable Ringgit provide a cushion against imported component costs, effectively safeguarding margins for fixed-price EPCC arrangements. We also note that China’s recent cancellation of export VAT rebates on photovoltaic products has had no material impact on performance, as module supply for secured projects is already substantially locked in, with remaining spot price exposure limited to smaller C&I projects that are becoming less significant as the mix shifts toward large-scale utility works.
Order Book. As of 31 Dec 2025, the unbilled order book remains healthy at approximately RM600.5m (c.1.7x FY25 revenue). This provides clear earnings visibility through FY27, even before accounting for potential wins from the LSS5+ pipeline.
Earnings revision. We have raised our margin assumptions for the EPCC segment to reflect the more favourable project mix margins and improved operational efficiencies as major utility-scale projects move beyond their initial setup phases. Consequently, we revise our core earnings upward by 13.2%, 11.5%, and 8.4% for FY26F, FY27F, and FY28F, respectively, while maintaining our existing order book replenishment forecasts.
Valuation & Recommendation. Following our earnings revision, we upgrade to BUY (from HOLD) and raise our TP to RM1.55 (from RM1.42). Our valuation is anchored on a sum-of-parts (SOP) framework—valuing the core EPCC business at 30x PE—and incorporates a three-star ESG rating. We continue to favour Samaiden for its: (i) proven expertise in ground-mounted solar PV projects, (ii) industry-leading low gearing with a net cash position, and (iii) strategic focus on bioenergy solutions, which distinguishes it from other solar EPCC players. Given the improved margin outlook and robust project execution, we believe the current valuation offers an attractive entry point to capture the Group's multi-year growth trajectory.
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 | 3.879490 | 3.910828 |
| EUR | 4.586505 | 4.596176 |
| CNY | 0.565924 | 0.567111 |
| HKD | 0.495908 | 0.499928 |
| SGD | 3.062969 | 3.087829 |