SUNVIEW: Solar Power Specialist Faces Quarterly Loss, Maintains ‘Buy’ Rating Amid Robust Order Book

A leading solar energy specialist reported a net loss for its fifth fiscal quarter, falling short of market expectations, yet an investment bank has reiterated its ‘Buy’ recommendation, citing a strong order book and promising future prospects. The company recorded a core net loss of RM0.9 million in 5QFY25, after accounting for unrealised foreign exchange gains.

Performance Review

For the cumulative 15-month period ending September 2025, the group’s core earnings reached RM5.4 million, significantly underperforming expectations at only 40.6% of initial estimates. The investment bank noted that a direct comparison to previous cumulative periods is not feasible due to a recent change in the company’s financial year end.

Revenue from Engineering, Procurement, Construction, and Commissioning (EPCC) services experienced a 16.0% quarter-on-quarter decline, settling at RM63.0 million. This led to a 21.4% quarter-on-quarter decrease in Profit Before Tax (PBT) for the segment, totaling RM7.1 million. The decline was primarily attributed to lower contributions from large-scale solar projects that were in their final stages of completion during the preceding quarter. In contrast, the power generation segment demonstrated robust growth, with revenue surging 44.9% to RM1.4 million and PBT tripling to RM0.8 million.

Future Outlook and Recommendation

Despite the recent underperformance, the company maintains a strong replenishment pipeline. Its unbilled order book stands at a healthy RM235.5 million, ensuring earnings visibility through FY26. The investment bank anticipates that ongoing LSS5 EPCC projects, which are being progressively awarded, will bolster the order book. The company is actively bidding for new projects, with an EPCC tender book amounting to RM4.0 billion. Optimism for future replenishment prospects remains high, driven by substantial EPCC opportunities from LSS5, LSS5+, and LSS6, coupled with growing interest in rooftop solar solutions across commercial, industrial, and residential sectors.

In light of these dynamics, TA SECURITIES has maintained its BUY recommendation. However, the target price has been revised downwards to RM0.25 from RM0.54 previously. This adjustment reflects revisions to the investment bank’s FY25E, FY26F, and FY27F earnings estimates to align with the company’s new financial year structure. The revised target price is derived by pegging the company’s FY26F EPS of 2.3 to a Price-to-Earnings Ratio (PER) of 20x, applying a discount relative to its larger peers. The investment bank expects the company’s performance in the coming quarters to be significantly driven by its ongoing Corporate Green Power Programme (CGPP) projects.