KUALA LUMPUR (July 12): RHB Research has raised the earnings forecast for Samaiden Group Bhd by 22%-20% for FY2024-2025 after increasing its order book assumption by another RM300 million, driven by the upcoming Corporate Green Power Programme (CGPP).

The research house estimates that the group’s recurring net profit for FY2024 will come in at RM23 million and RM32 million for FY2025.

This follows Samaiden’s announcement on Tuesday (July 11), where the company said that it had secured an engineering, procurement, construction and commissioning (EPCC) contract for the Large-Scale Solar 4 (LSS4) worth RM181.4 million.

“We continue to like the stock as a beneficiary of Malaysia’s strong demand for solar energy. Given its proven track record, the group is likely to continue seeing robust contract wins as more renewable energy initiatives are introduced,” it said in a note on Wednesday (July 12).

Following the contract win, Samaiden’s orderboook increased by 58% to RM388 million, said RHB Research. It added that the gross profit margin is guided to be similar to previous LSS4 contracts at 10% to 15%.

Samaiden has received limited notice to proceed with site clearing and expects installation and construction to begin by the end of 1QFY2024 or in early 2QFY2024. The construction is expected to take a period of 12 months.

RHB Research’s new target price for the solar company is at RM1.29 (from RM1.05), based on an unchanged estimated price-earnings (PE) ratio of 20 times for FY2024.

“This is at a 20% discount to larger peer Solarvest’s 25 times PE — given that the latter secured a few asset contracts in the previous LSS4 round — and discounted cash flow on Samaiden’s 60% biogas asset,” it said in its report.

At 10am, Samaiden’s share price stood at RM1.17, up 2.63% from the previous close of RM1.14. This values the company at some RM449 million.