• Solarvest Holdings has been awarded an EPCC contract by Suria Hijauan Sdn Bhd, which is 51%-owned by LBS Bina Group.
• Suria Hijauan is also 20%-owned by Ocean Solar Energy, which in turn is owned by Mr Tan Chyi Boon's parents. Mr Tan Chyi Boon is a shareholder of Solarvest.
• The contract sum is RM104mil. The contract is expected to be completed at the end of 2025F. The EPCC contract entails the construction of a solar energy generating facility with a capacity of 25.4MWac in Seremban.
• We view the contract positively as it would sustain Solarvest's earnings. However, we are not revising our earnings forecast for Solarvest as we have already imputed a revenue of RM696.1mil for FY26F. A solar EPCC contract takes about 12-18 months to be completed.
• For FY25F, we forecast Solarvest's revenue to grow by 17% to RM583.2mil on the back of CGPP (Corporate Green Power Programme) projects. These are expected to replace the LSS4 projects, which were completed in FY24.
• We maintain HOLD on Solarvest with an unchanged fair value of RM1.55/share. Our fair value of RM1.55/share is based on a FY25F PE of 25x, which is the two-year average.

Source: AmInvest Research - 11 Oct 2024