West Wing, Level 13,

Berjaya Times Square, MAIN MARKET

No 1, Jalan Imbi,
Industrial Products &
55100 Kuala Lumpur
Tel: (03) 21171888 Services
Fax: (03) 21427678 1 September 2023

Solarvest Sustained Earnings Momentum

RESULTS UPDATE
NEUTRAL
Closing Price
Target Price
Consensus Price
Stock Return Information
KLCI
Expected s ha re pri ce return (%)
Expected di vi dend return (%)
Expected tota l return (%)
Key Statistics
Sha ri a h Compl i a nt
Bl oomberg Ti cker
Ms i a Ti cker / Stock Code
Sha res Is s ued (m)
Ma rket Ca pi ta l i s a ti on (RM m)
52 Week Hi /Lo Pri ce (RM)
Avg Tra di ng Vol ume (3-mth)
Es t Free Fl oa t (%)
YTD Returns (%)
Beta (x)
We maintain our NEUTRAL call with a higher TP of RM1.37 (+RM0.17), after we included
the Corporate Green Power Programme (CGPP) earnings estimate into our SOP derived
RM 1.31
valuation. We like the company for its: (1) firm earnings growth prospects that are
RM 1.37
underpinned by a growing orderbook, (2) recurring income from solar assets, (3) solidifying
RM 1.40
and building new customer base though its one-stop solutions services. Risk to price upside
include: (1) project delays, (2) rich valuations and (3) softer-than-expected order book
replenishment.
1,451.94
4.6 Within expectation. Solarvest‘s 1QFY24 earnings came in within expectations; the
0.4 RM6.7m PATAMI accounts for 22% of our earnings forecast. We see earnings catching up
5.0 with the commencement of its 25MW and 13MW LSS4 plants in June 2023 and another
12MW LSS4 plant in September 2023.
YES Notable areas. 1QFY24 revenue expanded 52.7% Y-o-Y and 26.6% Q-o-Q respectively,
SOLAR MK thanks to higher LSS4 project recognition. 1QFY24 PATAMI margin, however, contracted
SLVEST/0215 to 4.7%, from 8.1% in 1QFY23, due to higher proportion of LSS4 projects recognition which
667.7 yield lower GP margin than smaller residential and C&I projects. 1QFY24 also saw higher
874.7 financial expenses and effective tax rate recognised, as compared to 1QFY23.
1.41/0.665
3,454,921 Earnings revision. We raise FY24-25 earnings to RM30.3m/RM34.8m, from
45.6 RM28.1m/RM34.1m respectively, on management’s guidance and our earnings
47.4 assumption of the recent CCGP awards. We also introduce FY26 PATAMI of RM34.2m.
0.81

Outlook. Solarvest’s outstanding orderbook sits at RM457m (1.3x orderbook-to-book ratio

Share Price Performance (%) against its FY23 revenue). We estimate the group has replenished RM100m in FY24 thus
Price change Absolute Relative far, including the rooftop solar photovoltaic system from Toyo Tyre. The group has secured
1 mth -1.56 -1.57 a cumulative capacity of 83.6mw worth of solar projects under its Powervest Programme
3 mth 22.33 17.11 that is expected to contribute RM37.0m of annual revenue upon their full commencement
12 mth 72.60 76.07 within the next 12-18 months. Recently, the group along with 3 distinctive consortiums,
clinched an accumulative ~ 89.7MW quota from the CGPP programme. The remainder
Major Shareholders (%) 250MW will be awarded later.
Atlantic Blue Holdings Sdn Bhd 22.9
Divine Inventions 9.0 Table 1: Historical Earnings and Forecasts
Lim Chin Siu 8.4
FYE Ma r (RM m) FY22 FY23 FY24(F) FY25(F) FY26(F)
Revenue 177.8 365.5 462.2 553.0 645.0
1-Year Share Price Performance
EBITDA 11.6 19.8 37.6 42.6 42.4
EBITDA Ma rgi n (%) 6.5 5.4 8.1 7.7 6.6
PAT 7.4 20.2 30.6 34.8 42.4
PATAMI 6.9 19.7 30.3 34.8 34.2
PATAMI Ma rgi n (%) 3.9 5.4 6.6 6.3 5.3
EPS (s en) 1.0 2.9 4.54 5.2 5.1
Ea rni ngs Growth (%) (57.2) 184.8 54.3 14.7 -1.8
Analyst: Wong Choo Hong PER (x) 120.9 42.5 27.5 24.0 24.4
Email: wongch@interpac.com.my
DPS (s en) NA NA 0.5 0.5 0.5
Di vi dend Yi el d (%) NA NA 0.4 0.4 0.4
ROE (%) 3.9 10.0 13.5 13.6 11.6
Net Gea ri ng Ra ti o NETCASH 0.16 0.2 0.1 0.2
Pri ce/Book (x) 4.8 4.2 3.7 3.3 2.8
Source: Inter-Pacific Research

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 Solarvest Holdings Berhad

The group aims to launch 2 sukuk issues to raise up to RM1.0b to finance capital
expenditures, asset and project acquisitions. RAM Rating Services Bhd has assigned a stable
outlook and preliminary credit ratings of A1 (long-term) and P1 (short-term) to the IMTNs
Programme and ICPs Programme. Solarvest is expanding its revenue stream by aiming to
secure 30% of its future EBIT from asset ownership which is driven by the various
government initiatives for sustainable energy and carbon neutrality pledge.

The group intends to expand its job scope beyond EPCC work via vertical expansion into the
renewable energy ecosystem solutions that includes green hydrogen, energy storage
system, RE certificate and EV charging station. We believe its role as an integrated clean
energy solution’s provider (provides end-to-end services from project management, EPCC,
O&M, insurance and investor/bank financing) will give them an edge over its competitors.

Table 2: Quarterly Income Statement and Comparison

FYE Mar (RM m) 1QFY24 1QFY23 YoY chg (%) 4QFY23 QoQ chg (%)
Revenue 143.4 52.7 172.3 113.2 26.6
Gross Profit 19.7 12.9 52.4 20.2 (2.7)
GP Margin (%) 13.7 24.5 (44.0) 17.9 (23.2)
EBITDA 11.8 7.2 62.9 9.8 20.2
EBITDA Margin (%) 8.2 13.7 (40.2) 8.6 (5.1)
PBT 9.4 5.7 64.0 7.6 23.6
Tax Expenses (1.4) (0.4) 250.9 (2.0) (30.6)
PATAMI 6.7 4.3 56.5 5.2 28.4
PATAMI Margin (%) 4.7 8.1 (42.5) 4.6 1.4
Core PAT 6.9 4.9 41.3 5.0 37.4
EPS (sen) 1.0 0.6 56.5 0.8 28.4
Source: Inter-Pacific Research

Table 3: Sum-of-the-parts valuation

Sum of parts RM m RM(sen)
EPCC FY24 PER25x 594.3 0.72
DCF WACC=6.96% 375.7 0.45
Warrant conversion 158.4 0.19
1,128.4 1.37

No. of shares (mil) 667.8

Warrants 158.4
Source: Inter-Pacific Research

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 Solarvest Holdings Berhad

Declaration of Independence of Opinions and of Interest in Securities

The analyst(s) responsible for the production of this report hereby certifies that the views expressed herein accurately and exclusively
reflect his or her personal views and opinions about any and all of the issuers or securities analysed in this report and were prepared
independently and autonomously. No part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the
inclusion of specific recommendations(s) or view(s) in this report. Inter-Pacific Research Sdn Bhd prohibits the analyst(s) who prepared
this research report from receiving any compensation, incentive or bonus based on specific investment banking transactions or for
providing a specific recommendation for, or view of, a particular company. Information barriers and other arrangements may be
established where necessary to prevent conflicts of interests arising. However, the analyst(s) may receive compensation that is based
on his/their coverage of company(ies) in the performance of his/their duties or the performance of his/their recommendations and
the research personnel involved in the preparation of this report may also participate in the solicitation of the business. In reviewing
this research report, an investor should be aware that any or all of the foregoing, among other things, may give rise to real or potential
conflicts of interest. Additional information is, subject to the duties of confidentiality, available on request.

(i) As of September 1, 2023, Inter-Pacific Research Sdn Bhd has a proprietary position in the securities (which may include but not
limited to shares, warrants, call warrants and/or any other derivatives) in the following company or companies mentioned or
recommended in this report: (a) Solarvest Holdings Berhad: nil.

(ii) As of September 1, 2023, the analyst(s) who prepared this report, and the associate(s), has / have an interest in the securities
(which may include but not limited to shares, warrants, call warrants and/or any other derivatives) in the following company or
companies covered or recommended in this report: (a) Wong Choo Hong: nil.

Signed

Victor Wan Kum Seng

Head of Research
Inter-Pacific Research Sdn Bhd

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 Solarvest Holdings Berhad

Ratings System
Ratings: Description:
BUY Total return is expected to exceed 15% in the next 12 months
TRADING BUY Total return is expected to exceed 10% in the next 3 months
NEUTRAL Total return is expected to be between –15% to 15% in the next 12 months
SELL Total return is expected to be below -15% in the next 12 months
TRADING SELL Total return is expected to be below -10% in the next 3 months
NOT RATED The stock is not within regular research coverage

Abbreviation
Abbreviation Definition Abbreviation Definition
PER Price Earnings Ratio CAGR Compounded Annual Growth Rate
PEG PER to Growth CAPEX Capital Expenditure
EPS Earnings per Share DPS Dividend per Share
FYE Financial Year End ROA Return on Asset
FY Financial Year ROE Return on Equity
CY Calendar Year PBT Profit Before Tax
MoM Month-on-Month PAT Profit After Tax
QoQ Quarter-on-Quarter EV Enterprise Value
YoY Year-on-Year EBIT Earnings Before Interest And Tax
YTD Year-to-Date EBITDA EBIT Depreciation &Amortisation
p.a. Per Annum WACC Weighted Average Cost of Capital
DCF Discounted Cash Flow NTA Net Tangible Asset
FCF Free Cash Flow BV Book Value
NAV Net Asset Value

IMPORTANT: This report has been prepared from sources that are believed to be reliable but we do not hold ourselves responsible for its completeness and accuracy. All opinions and
estimates in this report are subject to change without notice. We do not accept any liability that may arise from the use of information in this report. Inter-Pacific Research Sdn Bhd and
or its associates may from time to time have interest and/or underwriting commitments in the company being reported. This report is for internal circulation only and the contents or
any part thereof cannot be reproduced in any manner whatsoever except with the prior written consent of Inter-Pacific Research Sdn Bhd.

Published by:

Inter-Pacific Research Sdn Bhd

199701033506 (449005-X)
West Wing, Level 13,
Berjaya Times Square,
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55100 Kuala Lumpur
General Line : 03-2117 1888 Fax : 03-2142 7678

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