Company Coverage
Solarvest Holdings (SOLAR MK) 1QFY27: A Sequentially Weaker Quarter; Net Margins Firm at 12%
BUY (Maintained)
Current price:
Target price:
Upside:
RM3.03
RM3.50
+15.5%
Analyst
Analyst
Highlights
1QFY27 net profit declined 21% qoq to RM19.0m (+20% yoy) due to slower EPCC progress in the quarter, while yoy growth was driven by higher RE assets contribution.
1QFY27 net margin was firm at 12%. 1QFY27 net profit accounts for 17% of our full-year earnings, and it is deemed in line with expectations as EPCC contribution will drive upcoming quarterly earnings.
We expect positive CRESS-related contract win to materialise in the next six months – starting off with a 200-300MW data centre contract win with Tier 1 data centre customers. Maintain BUY with a target price of RM3.50, pegged to 25x FY28 EPS (+1SD from mean PE).
Analysis
1QFY27: A sequentially weaker quarter. Solarvest Holdings (Solarvest) booked a 21% qoq decline in 1QFY27 net profit to RM19.0m (-21% qoq). This was attributed to the engineering, procurement, construction, and commissioning (EPCC) segment’s weaker delivery of early-stage project execution for its LSS5 contracts. Conversely, the healthy yoy growth was driven by higher income from the group’s solar assets as two additional corporate green power projects (CGPP) came on-stream in the quarter. 1QFY27 earnings accounted for 17% of our full-year FY27 forecast. We deem the results in line with expectations with stronger earnings expected in the upcoming quarters.
Highlights
1QFY27 net profit declined 21% qoq to RM19.0m (+20% yoy) due to slower EPCC progress in the quarter, while yoy growth was driven by higher RE assets contribution.
1QFY27 net margin was firm at 12%. 1QFY27 net profit accounts for 17% of our full-year earnings, and it is deemed in line with expectations as EPCC contribution will drive upcoming quarterly earnings.
We expect positive CRESS-related contract win to materialise in the next six months – starting off with a 200-300MW data centre contract win with Tier 1 data centre customers. Maintain BUY with a target price of RM3.50, pegged to 25x FY28 EPS (+1SD from mean PE).
Analysis
1QFY27: A sequentially weaker quarter. Solarvest Holdings (Solarvest) booked a 21% qoq decline in 1QFY27 net profit to RM19.0m (-21% qoq). This was attributed to the engineering, procurement, construction, and commissioning (EPCC) segment’s weaker delivery of early-stage project execution for its LSS5 contracts. Conversely, the healthy yoy growth was driven by higher income from the group’s solar assets as two additional corporate green power projects (CGPP) came on-stream in the quarter. 1QFY27 earnings accounted for 17% of our full-year FY27 forecast. We deem the results in line with expectations with stronger earnings expected in the upcoming quarters.
BUY (Maintained)
Current price:
Target price:
Upside:
RM3.03
RM3.50
+15.5%
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at this link, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
