• Malakoff Corporation has appointed Solarvest Holdings as its solar PV systems contractor to accelerate the solar power purchase deals with several logistics players in the country.

• Malakoff said that the tie-up will power up the logistic facilities of industry players, namely Pos Malaysia, Northport (Malaysia) and Johor Port, with advanced solar PV systems.

• The solar facilities installed will be under a solar power purchase agreement ranging between 20 and 25 years.

• Upon completion, the total generation from the three facilities would produce about 11,609.90MWh of clean electricity per annum.

• Under the partnership, Solarvest will be undertaking the engineering, procurement, construction and commission works while Malakoff will finance and own the rooftop solar assets.

• We estimate that the total generating capacity of the solar projects for Pos Malaysia, Northport and Johor Port would be about 10MW. In comparison, Malakoff’s effective power generating capacity in Malaysia is about 5,822MW.

• Hence, we do not expect earnings contribution from the solar projects to be significant.

• Currently excluding the above solar projects, we believe that Malakoff has about 69.7MW of renewable asset projects, which have not come onstream yet. These include the 30MW Batu Bor and 25MW Lubuk Paku hydro power plant projects.

• We maintain HOLD on Malakoff with a DCF-based fair value of RM0.95.

Source: AmInvest Research - 28 Jun 2021