KUALA LUMPUR (March 15): Renewable energy players rose today after winning bids for the fourth cycle of the large-scale solar programme (LSS4).
At 10.52am, Advancecon Holdings Bhd gained 1.5 sen or 3.85% to 40.5 sen; Solarvest Holdings Bhd gained three sen or 1.07% to RM2.84; MK Land Holdings Bhd increased by three sen or 14.29% to 24 sen.
Meanwhile, Tan Chong Motor Holdings Bhd grew eight sen or 6.78% to RM1.26; JAKS Resources Bhd climbed 2.5 sen or 3.47% to 74.5 sen; KPower Bhd advanced three sen or 1.35% to RM2.25.
Ranhill Utilities Bhd also went up 4.5 sen or 5.26% to 90 sen, while Gopeng Bhd surged 19.5 sen or 29.32% to 86 sen and Uzma Bhd jumped eight sen or 10.6% to 83.5 sen.
Last Friday, the Energy Commission announced the list of 30 shortlisted bidders of the LSS4, with prices ranging from 17.68 sen/kWh to 24.81 sen/kWh, for a total awarded capacity of 823.06MW out of the 1,000MW offered.
Advancecon, Solarvest, MK Land, Tan Chong Motor, JAKS Resources, KPower, Ranhill Utilities, Gopeng, Tenaga Nasional Bhd and Uzma are among the identified listed companies that have been shortlisted for the projects.
Kenanga Research in a note today said that based on its rough estimates, the market rates for project internal rate of returns should be within the mid-to-high single-digit range, with capital expenditure ranging from RM3 million to RM4 million per MW, of which more than 60-70% are engineering, procurement, construction and commissioning (EPCC) costs, with the remainder being land costs.
“Overall, we identified the solar EPCC players (e.g. Solarvest, Samaiden Group Bhd) to be the biggest beneficiary of the LSS4 programme.
“Solarvest is expected to secure about 200-300MW, while we believe Samaiden should be able to at least secure about 100MW,” it said.
Kenanga also expects LSS4 EPCC to fetch roughly low-teens gross margins.
“Moving forward, in tandem with the government’s target of reaching 20% renewable energy use in Malaysia by 2025 (from about 2% currently), we believe further iterations of the LSS programme could still be possible,” it said.
As solar still remains the biggest driver of new renewable energy capacity in Malaysia, increased participation in other government-related programmes are also likely, Kenanga said.
“The award of LSS4 also further confirms the down trending cost of solar energy,” it said.