PublicInvest Research

Sunview Group Bhd - Clean Energy Solution Provider

Publish date: Fri, 30 Sep 2022, 10:34 AM
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Sunview Group Bhd (SUNVIEW) carries out engineering, procurement, construction and commissioning (EPCC) for solar photovoltaic (PV) facilities providing end-to-end services from engineering design, planning and procurement, construction and installation up to testing and commissioning. Besides that, SUNVIEW provides construction and installation for solar PV facilities including large scale solar (LSS) PV facilities projects, operating as a subcontractor to EPCC contractors. SUNVIEW also provides associated services and products to complement its core services in EPCC, and construction and installation services. In 2019, SUNVIEW embarked on being an asset owner of solar PV facilities for solar power generation and supply. As at 30 Aug 2022, SUNVIEW has a total unbilled order book of RM558.34m, which is expected to be completed progressively between FY23 and FY25.

Moving forward, SUNVIEW intends to expand its solar PV business and address potential opportunities in the EPCC of biogas plants. Moreover, besides provision of complementary products for solar PV power applications, SUNVIEW intends to purchase operational equipment as well to cater to the expansion of its solar PV business. We derive a fair value of RM0.48 based on a 10x PE multiple to its CY23F EPS of 4.8sen. The IPO is expected to raise approximately RM34.2m from the issuance of 118.0m new shares. Besides utilising 58.7% of the proceeds as working capital, 4.9% and 5.4% of the proceeds are allocated for business expansion and capital expenditure, respectively.

  • Growth drivers. SUNVIEW’s growth will be driven by: i) expansion of its solar PV business, ii) expansion into other renewable energy facilities and complementary products, iii) market expansion, and iv) purchase of operational equipment for its solar PV business operations.
  • Competitive strengths. SUNVIEW’s competitive strengths include: i) proven track record, ii) experienced technical and management team, iii) all-rounded business model, and iv) zero-capital expenditure arrangement with presence of solar PV investors.
  • Catalysts. Key drivers by government initiatives and policies may include introduction of various: i) solar PV programmes, ii) tax incentives, iii) rural electrification programmes, and iv) policies to increase the use of renewable energy.
  • Key risks. Key downside risks, among others, include: i) dependency on performance of solar PV industry, ii) competition from other industry players, iii) unanticipated increase in project cost, iv) dependency on its subcontractors to perform certain works for its solar PV projects, v) high reserve margin, vi) fluctuation in the foreign currency exchange, and vii) shortage of raw material for the manufacture of solar cells.

Source: PublicInvest Research - 30 Sept 2022

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