• Local solar energy services provider that has completed 98 EPCC of rooftop solar PV facility projects and the provision of construction and installation for 6 LSS PV plants as a subcontractor.

• We project core earnings to be driven by strong unbilled order book which is expected to be completed in FY23-FY24, as well as the plan to expand the solar power supply business and venture into EPCC of biogas plant.

• Sunview is valued by pegging its FY24f core EPS of 4.8 sen to P/E of 13.0x, leading to a FV of RM0.63.

Company Background

• Sunview Group Bhd (Sunview) history traces back to 2013 following the establishment of its wholly-owned subsidiary, Fabulous Sunview Sdn Bhd (Fabulous Sunview) which was initially focusing on engineering, procurement, construction and commissioning (EPCC) of rooftop photovoltaic (PV) facilities for residential buildings. In 2018, Fabulous Sunview acquired Solare Truss Sdn Bhd that was involved in the installation of solar PV facilities and supply of related equipment.

• Following the incorporation of Solarcity REIT Sdn Bhd (Solarcity REIT) in 2019, Fabulous Sunview ventured into the business of investing in solar PV facilities for solar power generation and supply. Meanwhile, the company embarked into another business expansion to engage as a subcontractor for 4 Large-Scale Solar (LSS) projects under LSS2 programme in Pahang, Terengganu, and Perak.

• In 2021, Fabulous Sunview successfully secured the first EPCC project for LSS PV plant under the LSS 2 programme in Sandakan, Sabah, followed by additional 5 projects as an EPCC contractor under LSS 1, LSS 2, and LSS 4 programme. In the same year, Vafe System Sdn Bhd and Suntech Energy Sdn Bhd (both engaged in solar power and generation and supply) were acquired by the company.

• In 2022, the company secured an additional EPCC of a utility scale solar PV facility under the NEDA programme. As at 30th August 2022, the company has secured a total of 7 utility scale EPCC projects with an aggregated contract value of RM658.0m where Fabulous Sunview has been appointed as the EPCC contractor.

• Sunview’s EPCC of solar PV facilities business focuses on the provision of end-to end services from engineering design, planning and procurement, construction and installation up to testing and commissioning. Project types include rooftop solar PV facilities for industrial, commercial, and residential buildings, as well as ground mounted solar PV facilities – LSS PV plants.

• From FY19 to 30th August 2022, the group has completed 98 EPCC of rooftop projects with an aggregated installed capacity of 23.08MWp. For ground mounted projects, the group has secured 7 LSS PV facility projects under LSS 1, LSS 2, LSS 4, and the NEDA programme with aggregated contract value of RM658.0m.

• In addition, Sunview operates as a subcontractor to EPCC contractors, providing construction and installation for solar PV facilities which include LSS PV facilities projects. Services provided include site clearance and management, mechanical and electrical systems, piling, installation of mounting systems, solar PV modules and related equipment.

• To complement its core services in EPCC, and construction and installation services, Sunview also provides associated services and products such as solar PV consulting and engineering services, operations and maintenance services, as well as supply of related equipment and ancillary construction materials.

• Under the solar power generation and supply segment, Sunview generates solar power for sale to individual consumers and Tenaga Nasional Bhd (TNB). This diversification since 2019 enables the group to generate recurring revenue to supplement its project-based revenue stream.

• As at 30th August 2022, Sunview owns 18 solar PV facilities. Among those, 15 were owned through Acquire-Own-Operate (AOO), where Sunview acquired the solar PV facilities. The remaining 3 were owned through Build-Own-Operate (BOO) or Build Own-Operate-Transfer (BOOT) where Sunview carried out the EPCC of the facilities. Regardless of ownership models, Sunview operates and maintains the facilities at its expense.

• In FY22, the EPCC of solar PV facilities segment accounted for RM75.2m (75.7%) of total revenue, followed by the provision of associated services and products segment at RM11.8m (11.9%) of total revenue. The construction and installation of solar PV facilities (subcontractor services) was the third largest contributor, generating RM8.8m (8.9%) of total revenue. Meanwhile, the solar power generation and supply contributed a total of RM3.5m (3.5%) to total revenue in FY22.

• In FY20-22, contribution from EPCC of solar PV facilities increased from 38.7% to 75.7% of total revenue, while the contribution from construction and installation of solar PV facilities declined from 41.7% to 8.9% as Sunview focused on the EPCC segment. Moving forward, the group anticipates further growth for the solar power generation and supply segment.

Source: Mplus Research - 17 Oct 2022