· SLVEST's 1QFY27 core net profit of RM19.7m (+16.2% YoY) accounted for 15% of our FY27F forecast and 17% of consensus estimates, which we deem in line given our expectation of stronger earnings in subsequent quarters.
· We remain positive on SLVEST's FY27 earnings trajectory, underpinned by its RM2.4bn unbilled order book, with RM1.15bn expected to be recognised in FY27F, alongside the upcoming LSS6 rollout and growing data centre power supply opportunities.
· We keep our FY27F/FY28F/FY29F core net profit forecasts unchanged at RM127.9m/RM232.1m/RM211.6m.
· Downgrade to HOLD with an unchanged TP of RM3.31, based on a SOP valuation, as SLVEST's strong share price rally has narrowed the upside to our TP.
Results inline, momentum to pick up ahead. SLVEST’s 1QFY27 core net profit (CNP) came in at RM19.7m, after adjusting for fair value gains on derivatives (-RM0.585m), net foreign exchange loss (+RM0.846m), impairment loss on assets (+RM0.375m), reversal of impairment losses on trade receivables (-RM0.147m), and bad debts written off (+RM0.144m). This accounted for 15% of our FY27F forecast and 17% of consensus estimates. We deem the results in line, as SLVEST has historically recorded weaker earnings in 1Q, with earnings momentum expected to improve in the coming quarters as the Group progresses with its projects.
QoQ. Revenue eased 42% QoQ to RM155.9m, despite the successful energization of two CGPP projects, as the bulk of revenue recognition was deferred to 2QFY27. Consequently, core net profit fell 28.8% QoQ to RM19.7m (4QFY26: RM27.6m), driven by lower utility-scale billings and module deliveries during this project transition phase.
YoY. Revenue grew 13.2% YoY to RM155.9m, as top-line performance was lifted by the commencement of multiple LSS5 projects and the resumption of CGPP execution. Consequently, core net profit rose 16.2% YoY to RM19.7m (1QFY26: RM16.9m), driven by steady EPCC project progress and the successful energization of two additional CGPP solar assets.
Outlook. We remain positive on the outlook for SLVEST in FY27, anchored by its RM2.4bn unbilled order book (92% utility; 8% C&I and residential) and an accelerating execution pipeline. We expect near-term revenue recognition to scale up significantly, with RM1.15bn of the existing order book expected to be recognised in FY27F.
The Group is well-positioned for the upcoming 2.5GW LSS6 rollout in January 2027, leveraging its strategic landbank access, which is vital for securing grid interconnection, to target a >20% EPCC market share. We are also optimistic about SLVEST's expanding footprint in data center power supply, with 300MW to 500MW of capacity expected to be signed under the CRESS framework.
Its active tenderbook of 11.8GWp for solar and 1.2GWh for BESS provides strong long-term earnings visibility, with BESS integration potentially doubling project CAPEX while preserving EPCC gross margins. Finally, the rollout of Solar ATAP, carrying a 42GW national technical potential, should continue to sustain a robust and recurring C&I revenue base.
Forecasts. We keep our FY27-29F core net profit forecasts unchanged at RM127.9m/RM232.1m/RM211.6m respectively.
Valuation. Downgrade to HOLD with an unchanged TP of RM3.31, based on a SOP valuation, our downgrade is primarily driven by SLVEST's strong share price appreciation, which has narrowed the upside to our TP to c.9.2% and no longer supports a BUY call. That said, we continue to believe SLVEST is well-positioned to capitalize 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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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.065852 | 4.097386 |
| EUR | 4.589381 | 4.597416 |
| CNY | 0.610175 | 0.610647 |
| HKD | 0.518032 | 0.522054 |
| SGD | 3.177971 | 3.202709 |