Solarvest share price more than doubles on Bursa debut

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KUALA LUMPUR (Nov 26): Solarvest Holdings Bhd’s share price more than doubled on its ACE Market debut today, making it the star performer on Bursa Malaysia in terms of first-day performance this year.

The stock opened at 60 sen, a premium of 25 sen over its initial public offering price of 35 sen, before rising further to close at 75.5 sen for a 40.5 sen or 115.71% gain. This raises the group’s market capitalisation to RM294.9 million.

Solarvest was also the day’s most active counter on Bursa, with 262.94 million shares traded.

Solarvest’s performance beat that of i-Stone Group Bhd, which recorded a 53.13% price gain on its first day of trading on the ACE Market last July.  

However, it is still far off compared with the year-to-date performance of Uni Wall APS Holdings Bhd. Listed on the LEAP Market in January, Uni Wall’s share price has rallied more than five times its IPO price.

Solarvest is a turnkey engineering, procurement, construction and commissioning (EPCC) solution specialist that designs, procures, installs and commissions large-scale solar (LSS) projects.

The group is 41.1%-owned by listed building materials distributor Chin Hin Group Bhd — formerly known as Boon Koon Group Bhd.

It has been reported that Solarvest won four of six bids in the second round of the LSS2 scheme, and is expecting to do better in LSS3 bidding process, the outcome of which is expected to be announced by year end.

For the six-month period ended Sept 30, 2019, Solarvest booked a net profit of RM7.87 million on revenue of RM139.96 million — representing a margin of 5.62%.

Solarvest is the first pure-play solar EPCC firm to be listed on Bursa Malaysia. Its direct competitor Mattan Bhd is reportedly planning to go public. Other peers include Cypark Resources Bhd and loss-making VSolar Group Bhd.

Kenanga Investment Bank Bhd analyst Teh Kian Yeong wrote in a recent note that Solarvest is projected to register more than 20% annual earnings growth for the next two years, on orderbook of RM184.5 million.

"Once listed, it will be the only 'pure solar PV' player in the local bourse. At [an] IPO price of 35 sen, which is valued at historical FY19 PER (price-earnings ratio) of 12.3x, it is fairly [valued] within the range of utility sector's valuation of 13x.

"However, for a small company seeking listing, the offer is not attractive enough. We believe the stock should be valued at prospective FY21 PER of 10x, which is similar to utilities EPCC contractor Pestech International Bhd's current price valuation of 9.8x PER. As such, Solarvest is fairly valued at 43 sen," Teh said.

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