Ray Go Solar: Navigating a Shifting Landscape in Q1 2025
Ray Go Solar Holdings Berhad (RGS), a key player in Malaysia’s renewable energy sector, has released its unaudited financial statements for the first half year ended 30 April 2025. This report offers a crucial glimpse into the company’s performance, revealing a period of revenue contraction but also highlighting strategic positioning within a dynamic market. While the topline figures show a dip, the underlying narrative points to the company’s efforts to adapt to increasing market competition and leverage long-term industry tailwinds.
A notable point from the report is the declaration of an interim dividend of 0.78 sen per share, totaling RM1.99 million, for the financial year ending 31 October 2025, which was paid on 27 December 2024. This demonstrates the company’s commitment to shareholder returns amidst a challenging environment.
Core Financial Highlights: A Closer Look
The first half of the financial year for Ray Go Solar saw a significant shift in its financial performance compared to the corresponding period last year. Let’s delve into the key figures:
Revenue Performance
The Group recorded a revenue of RM9.57 million for the first half year ended 30 April 2025. This represents a 35.47% decline from the RM14.83 million achieved in the same period of the previous year. The company attributes this decrease primarily to intensified market competition and delays in project awards, which impacted its ability to replenish its order book at the prior year’s pace.
Current Period (First Half Year Ended 30 April 2025)
Revenue: RM9,570,000
Previous Period (First Half Year Ended 30 April 2024)
Revenue: RM14,830,000
Profitability Overview
Following the revenue decline, the Group’s profit before tax (PBT) for the first half year ended 30 April 2025 stood at RM0.32 million, a substantial decrease of 61.90% from RM0.84 million in the corresponding period of the previous year. Consequently, the profit after tax (PAT) also saw a decline.
Current Period (First Half Year Ended 30 April 2025)
Profit Before Tax: RM315,000
Profit After Tax: RM238,000
Previous Period (First Half Year Ended 30 April 2024)
Profit Before Tax: RM840,000
Profit After Tax: RM639,000
Earnings Per Share (EPS)
Basic and diluted earnings per share for the period were recorded at 0.09 sen, down from 0.25 sen in the previous corresponding period, reflecting the reduced profitability.
Current Period (First Half Year Ended 30 April 2025)
Basic/Diluted EPS: 0.09 sen
Previous Period (First Half Year Ended 30 April 2024)
Basic/Diluted EPS: 0.25 sen
Business Segment Performance
The Engineering, Procurement, Construction, and Commissioning (EPCC) segment continues to be the primary revenue driver for RGS. While overall EPCC revenue declined, the residential EPCC segment saw a significant increase in contribution, indicating a shift in demand or strategic focus. The Operations and Maintenance (O&M) segment continued to provide a stable income stream, underscoring its importance for the Group’s financial stability.
Here’s a breakdown of revenue by business activity for the first half year ended 30 April 2025:
| Business Activity | 30.04.2025 (RM’000) | % | 30.04.2024 (RM’000) | % |
|---|---|---|---|---|
| EPCC: Industrial & Commercial | 7,310 | 76.38 | 13,919 | 93.86 |
| EPCC: Residential | 2,150 | 22.47 | 751 | 5.06 |
| O&M: Industrial & Commercial | 91 | 0.95 | 160 | 1.08 |
| O&M: Residential | 19 | 0.20 | – | – |
| Total | 9,570 | 100.00 | 14,830 | 100.00 |
Financial Position and Cash Flow
As of 30 April 2025, RGS reported total assets of RM22.08 million, a decrease from RM26.29 million at 31 October 2024. Total equity also saw a reduction to RM9.42 million from RM11.17 million over the same period, partly influenced by the dividend payment. Despite the revenue and profit decline, the Group demonstrated strong operational cash generation, with net cash generated from operating activities increasing to RM3.36 million for the first half of 2025, up from RM3.23 million in the corresponding period of 2024. This indicates efficient management of working capital.
Risks and Prospects: Charting the Future
Despite the current challenges, Ray Go Solar remains optimistic about the long-term prospects of the renewable energy (RE) sector in Malaysia. Several factors underpin this positive outlook:
- Strong Policy Direction: The Malaysian Government’s ambitious targets to achieve 70% RE in the national energy mix by 2050, with interim goals of 31% by 2025 and 40% by 2035, provide a robust foundation for industry growth.
- Favorable Cost Environment: The recent imposition of higher tariffs on Chinese solar exports by the United States has led to a regional oversupply of solar components. This trend could potentially lower material costs for EPCC players like RGS, enhancing project margins and competitiveness.
- Domestic Initiatives: Programmes under the National Energy Transition Roadmap (NETR), the Corporate Renewable Energy Supply Scheme (CRESS), and the expansion of Net Energy Metering (NEM) 3.0 are expected to stimulate demand across residential, commercial, and industrial segments. RGS is strategically positioned to capitalize on these opportunities through its EPCC services and partnerships.
As of 30 April 2025, the Group holds an unbilled order book of RM9.51 million, which is expected to be progressively recognized in the current financial year. While acknowledging the increasing competition within the solar EPCC business due to more players entering the market, RGS plans to actively pursue new project tenders and expand its presence in key regions by leveraging its established track record and execution capabilities.
In light of these factors, the Board maintains a cautiously optimistic view, anticipating satisfactory results for the upcoming financial year.
Summary and Investment Recommendations
Ray Go Solar’s latest financial report for the first half of FY2025 presents a mixed picture. While revenue and profit have seen a decline primarily due to heightened market competition and project delays, the company’s operational cash flow remains healthy, and its unbilled order book provides a degree of revenue visibility. The broader outlook for Malaysia’s renewable energy sector is undeniably positive, supported by strong government policies and increasing demand for sustainable solutions.
Key points from this report include:
- Revenue and profit declines primarily attributed to increasing market competition and project award delays.
- The EPCC segment remains the core revenue driver, with notable growth in residential projects.
- Strong positive net cash generated from operating activities, showcasing efficient cash management.
- A healthy unbilled order book of RM9.51 million providing future revenue.
- The company operates within a supportive regulatory environment with clear long-term RE targets.
- Potential for lower material costs due to regional oversupply of solar components.
- RGS is actively pursuing new tenders and expanding its regional presence to counter competitive pressures.
The company’s cautious optimism reflects the balance between current market headwinds and the robust long-term potential of the renewable energy industry. Investors should observe how RGS navigates the competitive landscape and capitalizes on the opportunities presented by Malaysia’s energy transition initiatives.
