SUNVIEW: Solar EPCC Firm Secures Landmark Project, Orderbook Soars Amidst Analyst ‘Hold’ Rating

A prominent player in the solar energy sector has announced a significant contract win, effectively quadrupling its unbilled orderbook and providing crucial revenue visibility for the coming years. This development, however, has seen AmInvestment Bank maintain its “HOLD” recommendation, citing pre-existing financial considerations.

Major Contract Bolsters Orderbook

The firm’s wholly-owned subsidiary, Fabulous Sunview, has accepted a Letter of Award (LOA) valued at RM289.7 million from Malakoff Evergreen (MEVSB). This agreement is for the engineering, procurement, construction, and commissioning (EPCC) of a solar PV power plant in Sungai Likau, Bintulu, Sarawak. MEVSB, a subsidiary of Malakoff Corporation Berhad, provides strong counterparty quality assurance. While the initial tender submission included operations and maintenance (O&M) scope, the LOA specifically limits the engagement to EPCC works. A definitive EPCC contract is expected to be executed within four months from the acceptance date.

Strategic Impact and Analyst View

This RM290 million project is a significant replenishment for the company’s orderbook, which had seen a sharp decline to RM76.5 million by the end of December 2025. The new contract boosts the unbilled orderbook to an estimated RM367 million, addressing concerns about a thinning pipeline and ensuring revenue streams for fiscal years 2027 and 2028. Furthermore, the project marks the group’s first major foray into East Malaysia, diversifying its geographical presence and validating its competitive standing in the large-scale solar (LSS) EPCC segment.

Despite these positive developments, AmInvestment Bank has reiterated its “HOLD” recommendation with an unchanged target price of RM0.35 per share, based on a CY27F PE of 20x. The bank noted that its earnings estimates remain unchanged as it had already factored in an order book of RM390 million for FY26F. The timeline and billing profile of the new EPCC contract are still pending finalisation, influencing current earnings projections.

Financial Considerations and Future Outlook

The “HOLD” rating from AmInvestment Bank reflects ongoing concerns regarding the company’s elevated net gearing, which stood at 125.9% as of its last reporting period, along with limited financial flexibility and a lower return on equity (ROE) compared to industry peers. The bank highlighted that a stronger balance sheet would be required for a potential re-rating.

Looking ahead, the company continues to actively bid for substantial solar EPCC jobs under various programmes, including CRESS, Solar ATAP, and the upcoming LSS6, with a tender pipeline reportedly valued at RM5 billion. Successful orderbook replenishment remains crucial for sustained future growth. However, key downside risks include the group’s high net gearing and potential for further gearing-up to fund the working capital requirements of new projects, as well as the risk of a fall in orderbook replenishment and increasing solar panel prices. The company is reportedly planning to raise equity to improve its capital structure.