Renewable energy outfit, Sunview Group Bhd has been on the rise in the past 5 days. The counter closed at 72 sen on Feb 9, gaining 7.5% over the past 5 days. After declining from its 52-week high of 96 sen in July to a low 59.5 sen in November, the counter has been on a technical rebound.

Based on technical charts, Sunview has room to move upwards, challenging the resistance levels of 79 sen and 88 sen.

Investors are probably optimistic on the company’s prospects as it is seen as an immediate-term beneficiary due to the potential step-up in demand for RE EPCC services.

As it is, analysts are upbeat on the renewable energy (RE) sector following the recent announcements by the Ministry of Energy Transition and Public Utilities (Metpu) The announcements included the extension of the Net Energy Metering (NEM) programme with an added quota of 400MW. There is also the start of the fifth bidding cycle of the large-scale solar (LSS) programme featuring quotas of 2GW, allowing bids of up to 500MW.

Additionally, there is a low-carbon energy-generation programme of 400MW to be implemented through the New Enhanced Dispatched Arrangement mechanism for non-solar energy.

Furthermore, a pilot project for a battery energy storage system, with a cumulative capacity of 400MWh, is set to be carried out by Tenaga Nasional Bhd (TNB).

The 2.4GW combined solar quota under the latest LSS and NEM programme translates into an estimated RM7.2 billion to RM8.4 billion worth of EPCC jobs, which we expect to be tendered out in the next 12 to 24 months, providing significant order book expansion opportunities.

This is on top of upcoming tenders for 800MW Corporate Green Power Programme power plants, which are expect to come within the first half of 2024 entailing RM2.4 billion worth of EPCC jobs.

There will also be the first 500MW of UEM Group Bhd-Itramas Corp Sdn Bhd’s 1GW hybrid solar National Energy Transition Roadmap flagship project in Johor worth potentially RM1.5 billion of EPCC jobs.

LSS programmes had seen a lull since its fourth awards in 2021, amid project hiccups due to sharp jump in solar panel prices which affected execution of projects won by some bidders who bid at too low tariffs at the time.

While Sunview is expected to reap some of the potential projects in the renewable energy sector, investors are cautious over its latest financial results.

For the second quarter ended Sept 30, 2023, it posted a lower net profit of RM1.4 million versus RM3.2 miil a year ago.

This is despite posting a huge jump in revenue to RM204.3 million in 2QFY24 versus RM78.9 million a year ago.

Sunview was one of the many EPCC players which saw lower gross profit margin due to competitive Power Purchase Agreement tariff offered to its LSS4 clients.

According to consensus estimates, Sunview is forecasted to show net profit of RM14.1 million in FY24 before increasing to RM21.1 million in FY25.

It does appear that investors are willing to take a bet on Sunview given its brighter outlook as it is operating in a booming sector.