KUALA LUMPUR (March 11): Clean energy specialist Solarvest Holdings Bhd rose as much as seven sen or 9.21% to 83 sen on Friday morning (March 11) after securing three engineering, procurement, construction and commissioning (EPCC) contracts for the development of large-scale solar photovoltaic plants in Perak under the Large Scale Solar 4 (LSS4) scheme worth RM154.4 million.
At 10.02am, the counter had pared some gains at 79 sen, still up three sen or 3.95%, with 6.43 million shares traded.
Over the past one year, the counter has fallen 57.53%.
Maybank Investment Bank analyst Nur Farah Syifaa' said in a note on Friday that the latest job wins increase Solarvest's outstanding order book by about 26% to about RM742 million or 3.3 times revenue for the financial year ended March 31, 2021 (FY21).
“Assuming a net profit margin of 7%, we forecast a net profit contribution of RM10.8 million into FY23 to FY24,” she said.
According to her, the latest contract wins mean Solarvest has won eight EPCC jobs for LSS4 amounting to RM572.6 million, to be completed by 2023.
“Given that the order book replenishment falls within our assumptions, we have made no changes to our earnings forecasts,” she said.
She kept her earnings forecasts for the company for FY23 to FY24, with an earnings recovery seen in FY23, when the majority of its outstanding order book is expected to be recognised.
“Elsewhere, we understand that the tender for LSS5 is expected to commence soon, which can help keep its order book momentum going,” she added.
According to her, Solarvest currently trades at an attractive FY23 price-earnings ratio of 17 times, slightly below one standard deviation of its two-year mean of 55 times.
She maintained her "buy" call on Solarvest, with an unchanged target price of RM1.29.