Background

Northern Solar Holdings Berhad (NSHB) is principally involved in the engineering, procurement, construction and commissioning (EPCC) of solar photovoltaic (PV) systems, generation of renewable energy (RE) as well as operations & maintenance (O&M) of solar PV equipment and systems. Unlike most other listed solar EPCC players, NSHB is purely involved in the rooftop solar segment, catering to industrial, commercial and residential customers. The solar PV EPCC business is the main contributor to NSHB’s revenue, accounting for 98.8% of the group’s FY24 revenue.

IPO Statistic

The IPO entails a public issue of 67.3mn new ordinary shares, and an offer for sale of 35.6mn existing ordinary shares, at an IPO price of RM0.63/share.

Public issue:

• 19.8mn new shares for application by the Malaysian public;

• 7.9mn new shares for application by eligible parties;

• 39.6mn new shares for private placement to selected investors, and

• 35.6mn offer for sale of existing shares

Main Competitive Advantages

1. Ability to capitalize on strategic partnerships for orderbook replenishment.

2. Proven track record in the rooftop solar EPCC industry; and

3. Well positioned to benefit from supportive domestic RE policies.

Valuation

At an IPO price of RM0.63/share, NSHB is priced at a trailing PER of 24.7x FY24 EPS. We value the company at 19.8x FY26 EPS, arriving at a fair value of RM0.98/share.

Source: TA Research - 13 Jan 2025