KUALA LUMPUR (Sept 29): Solar photovoltaic solutions provider Sunview Bhd, which is scheduled to be listed on the ACE Market on Oct 17 at an initial public offering (IPO) price of 29 sen, has been ascribed a fair value price of 60 sen by Mercury Securities Sdn Bhd.

In an IPO note on Thursday (Sept 29), Mercury Securities said the target price (TP) is based on its forecast FY24 earnings per share of 4.4 sen for Sunview, and a price earnings of 13.7 times, in line with its peers' average.

“We like the stock for its attractive growth prospect on the back of an increase in solar photovoltaic (PV) installation demand under the government’s roadmap to achieve a 31% and 40% RE generation mix by 2025 and 2035. The group has a 4% market share by business value. The target price represents a potential return of 106.9% over the IPO price,” Mercury Securities said.

According to Mercury Securities, the group achieved a three-year revenue compound annual growth rate (CAGR) of 159.9% from FY2019 to FY2022.

For the financial year ended March 2022 (FY22), Sunview posted a 53.46% year-on-year jump in net profit on the back of a 129% increase in revenue to RM99.26 million. Its profit margin for FY22 was 8.95%.

Mercury Securities’ analyst Ronnie Tan said the company plans to leverage its experience in the engineering, procurement, construction and commissioning (EPCC) of solar PV facilities to venture into the EPCC of other RE facilities like biogas plants, which are designed to generate electricity by using waste materials such as agricultural waste.

“With a strong order book of RM558.34m (million) as of Aug 30, 2022 expected to be fully recognised by FY24, we think that the company is well positioned to benefit from the increase in solar photovoltaic demand under the government’s Energy Transition Plan 2021–2040,” said Tan.

Sunview is seeking to raise RM34.22 million from its IPO exercise.

To date, the company has completed 98 EPCC of rooftop solar PV facility projects, ranging from industrial, residential and commercial buildings, with a cumulative installed capacity of 23.08 MWp (Megawatt peak).

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