Investment Highlights

Solarvest Holdings reported a decent set of results. However, we believe upside is limited, with valuations already fair at a diluted FY26F PE of 22x. We maintain HOLD on the group. Our target price of RM1.70/share is based on a CY26F PE of 23x, which is the five-year average. Our PE assumption of 23x is higher than Solarvest's current FY26F PE of 22x.

• Earnings are expected to pick up in 2HFY25. We consider Solarvest's 1HFY25 net profit to be within our forecast and consensus. The group's earnings are expected to gain momentum in 2HFY25 on the back of a higher recognition of progress billings and completion of projects.
• In spite of a 37.7% drop in revenue, Solarvest's net profit rose by 22.7% YoY to RM17mil in 1HFY25. This was driven mainly by higher margin contracts in the commercial and industrial segments, lower costs of solar panels and increased sales of electricity.
• LSS assets are contributing. EBIT of the sale of electricity division surged to RM11.3mil in 1HFY25 from RM1.9mil in 1HFY24 due to the commissioning of the LSS (large-scale solar) assets. Solarvest owns three LSS assets in Selangor and Perak with a total capacity of 67.3MWp.
• EBIT of the EPCC division rose by 3.4% YoY to RM23.3mil in 1HFY25. Going forward, earnings are expected to rise further on the back of the CGPP (Corporate Green Power Programme) projects. Unbilled order book stood at RM961mil as at 25 November 2024.

Source: AmInvest Research - 26 Nov 2024