| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
A leading Malaysian construction and infrastructure conglomerate’s Australian subsidiary has been appointed as the Early Contractor Involvement (ECI) partner for the ambitious Mortlake Energy Hub in Victoria, Australia. This significant development is seen by investment analysts as a robust reinforcement of the group’s strategic positioning in the burgeoning renewable energy sector and is expected to substantially enhance its future order book.
Project Details
The Mortlake Energy Hub project, spearheaded by Yanara (formerly BrightNight Asia Pacific), represents Australia’s largest integrated hybrid renewable energy development. Spanning a 1,060-hectare site in South-Western Victoria, the hub will incorporate a 450MW solar farm and a 600MW / 2,400MWh battery energy storage system (BESS). Once operational, the facility is projected to deliver firm, dispatchable renewable power capable of supplying approximately 200,000 homes annually.
As the designated delivery partner, the conglomerate’s Australian arm will oversee comprehensive end-to-end execution, encompassing design development, securing regulatory and council approvals, managing key procurement processes, and supervising critical construction work packages. The project, which has received approval under Victoria’s Development Facilitation Program (DFP), is expected to commence construction in mid-CY26, targeting full completion and commissioning by CY29. Management has indicated an early indicative project value for this ECI contract ranging from AUD0.5-1.0bn.
Analyst’s View and Future Outlook
TA Securities expressed a positive outlook on the appointment, highlighting that the ECI role positions the incumbent contractor favorably to secure the project’s main construction package. Participating in design optimisation, constructability assessments, and cost engineering at an early stage typically establishes the contractor as the preferred choice for full-scale execution. Given the group’s strong track record in large-scale infrastructure and renewable energy projects in Australia, TA Securities views the likelihood of securing the main works contract as high.
This appointment is expected to solidify the group’s growing presence in Australia’s energy transition landscape, aligning with its strategy to expand exposure to renewable energy and battery storage infrastructure. Analysts estimate the main construction package for the Mortlake Energy Hub could potentially translate into approximately RM3.8bn of new order book. If secured, this would meaningfully enhance the group’s order book replenishment visibility heading into CY26.
Recommendation and Valuation
Despite the significant project win, TA Securities has made no changes to its earnings forecasts, noting that the job acquisition was within its expectations. The investment bank maintained its SOP-derived target price at RM0.25, which includes a 3% ESG premium consistent with its 4-star ESG rating. The firm reiterated its BUY call on the stock, with the target price representing a 25.0% upside from the last traded price of RM0.20.
