Background

Solar District Cooling Berhad (SDC) is mainly involved in the provision and maintenance of building management systems (BMS), solar thermal systems (STS) and energy saving services (ESS). Within the BMS space, the group focuses on system integration of building facilities to provide automation, energy saving services as well as building facility management centralization. In the STS & ESS segment, the group focuses on solar thermal hot water systems, mainly for heavy users of hot water such as hospitals and hotels.

IPO Statistic

The IPO entails a public issue of 118.7mn new ordinary shares, at an IPO price of RM0.38/share.

Public Issue:

• 21.2mn new shares for application by the Malaysian public;

• 21.2mn new shares for application by eligible parties;

• 76.3mn new shares for private placement to selected investors, and

Main Competitive Advantages

1. Established track record in the BMS industry.

2. Strong technical expertise and certifications.

3. Own brands to facilitate awareness and customer loyalty.

Valuation

At an IPO price of RM0.38/share, SDC is priced at a trailing PER of 25.4x FY23 EPS. We value the company at 17.6x FY25 EPS, arriving at a fair value of RM0.43/share.

Source: TA Research - 5 Sept 2024