SAMAIDEN: Project Momentum Fuels Strong Performance, Target Price Raised

An investment bank has reiterated a “BUY” recommendation for a prominent player in the renewable energy sector, raising its target price on the back of strong financial performance and a robust order book. The company’s first-quarter fiscal year 2026 results met expectations, showcasing significant year-on-year growth driven by the progress of utility-scale projects and effective operational execution.

Performance Review

For the first quarter of fiscal year 2026, the company reported a topline of MYR88.1 million and a core profit of MYR6.2 million. While the topline saw a sequential decline of 34.7% quarter-on-quarter, it marked a substantial 78.4% increase year-on-year. Core profit also demonstrated strong year-on-year growth, rising by 85.7%, and represented 22% of both the investment bank’s and Street’s full-year estimates. This strong performance was primarily attributed to higher topline contributions stemming from the accelerated progress of utility-scale projects. The results are deemed to be in line with expectations, with earnings momentum projected to strengthen in the upcoming quarters as Corporate Green Power Programme (CGPP)-related initiatives gain traction.

Future Outlook and Growth Drivers

The company’s order book remains healthy, standing at approximately MYR617.5 million as of September. Management is actively pursuing an ambitious target of achieving a MYR1 billion order book by the next year. This growth is anticipated to be propelled by ongoing recognition from Large-Scale Solar (LSS) 5 and LSS5+ projects, alongside potential Corporate Renewable Energy Supply Scheme (CRESS) opportunities. Specifically, EPCC and installation works for the 99.99MWac LSS5 project in Kelantan are expected to commence soon, while progress on a similar project in Johor is already in its early stages. Despite competitive pressures for EPCC jobs, the group is poised for improved earnings as more assets are built, commissioned, and begin generating cash flow, with CGPP projects expected to contribute significantly from 1QCY26. The company’s robust cash position of MYR195.1 million as of September equips it financially to tender for substantial new projects, up to 200MWac.

Key Risks

Potential risks identified include the discontinuation of solar incentives, intensified competition in the EPCC market, and higher-than-expected project costs.

Valuation and Recommendation

The investment bank maintains its “BUY” rating, with a revised target price of RM0.25, reflecting a 25.0% upside from the last traded price of RM0.20. The valuation remains grounded in the company’s strong project pipeline and strategic positioning within Malaysia’s growing renewable energy landscape.