Riding on Malaysia renewable energy roadmap. Being the second-largest solar EPCC player with an outstanding track record in project execution and delivery, SAMAIDEN is well-positioned to ride on the government’s initiative in growing renewable energy (RE) resources. To recap, the Ministry of Energy and Natural Resources plans to increase the share of RE in its installed capacity to 31% by 2025 and 40% by 2035. With solar energy identified as the key RE resource for Malaysia, the government has approved the allocation and redistribution of a 1,200 MW quota for solar resources via (i) utilisation of existing RE mechanism; (ii) exploration of new RE programmes and (iii) procurement of green electricity via Virtual Power Purchase Agreement. With this, we are optimistic that SAMAIDEN can expand its order book of RM410m.

Regional expansion to tap untapped market. To capitalize on the fast-growing RE adoption trend in ASEAN, we understand that SAMAIDEN is eyeing to expand its footprint to the overseas market. In 1Q22, SAMAIDEN partnered with Tokyo-listed engineering firm Chudenkon Corp (held 15.1% stake in SAMAIDEN) and has been actively exploring opportunities in the RE sector in Malaysia and the growing ASEAN markets. We gather that SAMAIDEN has set their targets on the Vietnam market, which offers a plethora of potential as the Southeast Asia region's fastest-growing RE market and second-largest electricity consumer.

Transferring to Main Market. After two years of floatation on the ACE Market, SAMAIDEN has met the main board listing requirements and is now seeking to transfer to the Main Market, which is expected to take place by 1H23. Such a move, in our view, will be a near-term catalyst to its share price as it allows SAMAIDEN to gain access to a wider investor base. To recap, Solarvest’s (another solar EPCC player) share price performance, has registered a 16% return in three months after transferring to the Main Market.

Trading near its uptrend support. Technically, SAMAIDEN is trading near its uptrend channel support of RM0.72-0.74. In the wake of the higher lows pattern, a decisive breakout above RM0.77 will spur prices higher towards RM0.82-0.85-0.88 territory. Cut loss at RM0.66.

Source: Hong Leong Investment Bank Research - 15 Nov 2022