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Samaiden Group Bhd closed at its 4-month high on Jan 30 at RM1.25 on the back of high trading volume. It still shy of its 52-week high of RM1.35 seen in July last year.

The upward movement is impressive given that it was trading at its low of 78 sen a year ago. In the past year alone, the counter has surged 51.2%.

Good news is the counter will likely see follow-through, lifting prices to test the historical resistances of RM1.30 and RM1.35 next.  A move to test the RM1.40 psychological level may follow if both the said resistances are taken out.

Fundamentally, Samaiden looks solid, riding on its renewable energy business. For instance, it has recently secured a build and operate a 7MW biomass power plant in Johor. 

The power plant will supply a net export capacity of 6MW to Tenaga Nasional Bhd for 21years, starting from Jan 2027. The FiT rate for the power plant is RM0.34/kWh. 

The plant will generate revenue of RM14 million annually at a net profit margin of 32%. The biomass power plant commands a higher tariff rate, translating to an IRR of 8% to 10%.

Samaiden’s long-term growth is well-supported by the National Energy Transition Roadmap (NETR) which sets an ambitious target of RE to make up 70% of total power generation capacity by 2050. 

Also, businesses in general, driven by commercial reasons (i.e. to save cost) and ESG considerations, have voluntarily invested in solar energy generation assets following the recent hikes in electricity tariffs.

Samaiden will also benefit from the increased commercial viability of solar power projects on falling solar panel prices and the export potential of RE given its position as one of the top players in the local solar EPCC market.

In addition, the company also has the ability to provide end-to-end solutions, including financing, while it has a proven track record in delivering projects on time and within budget. 

For the first quarter ended Sept 30, 2023, Samaiden posted marginally higher net profit of RM3 million versus RM2.4 million a year ago. Its revenue increased slightly to RM46.2 million from RM40.8 million a year ago. These are reasons for investors to pay attention to Samaiden given its bright outlook.