• Maintain BUY and MYR1.33 TP, 29% upside. We maintain our positive outlook on Samaiden Group following the announcement of its second Corporate Green Power Programme (CGPP) contract win, which further solidifies its position as a key player in the solar energy sector. This new contract underlines the group's growth prospects, which aligns with Malaysia’s strategy to increase its renewable energy (RE) mix.

• Another CGPP EPCC contract win. Samaiden has been awarded its second CGPP EPCC contract, valued at MYR39.2m, for a 10MWac large-scale solar (LSS) plant in Bahau, Negeri Sembilan. The contract was granted by Bahau Power (BP), a newly incorporated entity in Oct 2023. BP's shareholders include Angelaxy Power (51%) and Uzma Environergy (49%). Angelaxy Power is wholly owned by Datuk Ir Chow Pui Hee, Managing Director and major shareholder of Samaiden. Similar to its previous CGPP contract, this transaction qualifies as a recurrent related party transaction (RRPT) and will require shareholder approval at Samaiden's fifth AGM in November.

• Outlook. With the addition of this contract, we estimate Samaiden’s orderbook to stand at MYR404.7m, marking a 29.1% increase from the MYR313.5m reported in 4QFY24 (Jun). This job win has also resulted in the group securing a total of 24MW EPCC contracts under the CGPP. For this contract, we forecast a GPM of 10-15%, in line with typical utility-scale EPCC projects. The Scheduled Commercial Operation Date (SCOD) is targeted for 15 Sep 2025.

• Maintain BUY. We keep our earnings estimates unchanged, as this contract is in line with our orderbook replenishment assumptions. Our SOP-derived TP is kept at MYR1.33, which is based on a valuation of: i) 24x FY25F P/E on EPCC earnings, (ii) DCF (WACC of 7.8% for its 60%-owned biogas asset), and iii) DCF (WACC of 7.8% for its biomass asset). We have yet to incorporate Samaiden's CGPP assets, pending the finalisation of its stake in these projects. Our TP includes a 6% ESG premium, reflecting the group’s ESG score of 3.3, which is above the country median of 3.0. Given its proven track record and ongoing participation in large scale solar (LSS) projects, Samaiden is well-positioned to benefit from the expanding demand for RE solutions, reinforcing its long-term growth potential.

• Risks. Downside risks include a discontinuation of solar incentives, competition risks, and higher-than-expected project costs.

Source: RHB Research - 3 Oct 2024