• Core net profit was up 82% yoy to RM13.2m in FY22, driven by higher progress billings on its expanded order book. The results were within our expectation but above the market’s
• We cut our core EPS by 3% in 2023E-24E to reflect higher depreciation and interest expense. Samaiden clinched RM340m of new contracts to expand its order book to RM358m at end-FY22
• We expect strong core EPS CAGR of 29% over FY22-25E and reaffirm our BUY call with a lower target price of RM1.00, based on unchanged target FY23E PER of 24x

Within Our Expectations

Core net profit of RM13.2m (+82% yoy) in FY22 matched our forecast but was 11% above consensus estimates of RM11.9m. Revenue jumped 182% yoy to a new record high of RM150.7m in FY22, driven by the expansion in the order book and higher progress billings. EBIT growth lagged but was still strong at 102% yoy to RM17.0m in FY22. EBIT margin normalised to 11.3% in FY22, compared to 15.8% in FY21 due to improved profitability on finalisation of accounts for certain completed projects. Core net profit fell 21% yoy to RM3.9m, mainly due to higher administration costs.

High Net Cash and Order Book

Positive FCF generation of RM5.5m in FY22 and proceeds from the private placement of new shares more than doubled the net cash balance to RM68.4m or RM0.18/share. Samaiden is exploring opportunities to expand its investment portfolio in renewable assets to generate recurrent earnings in the long run. Samaiden will jointly explore investment and business opportunities with its strategic shareholder Chudenko Corporation (holds a 15.2% stake) in RE projects and rooftop solar PV projects servicing Japanese customers in ASEAN. There are good prospects to expand its order book of RM358m with the government working towards increasing RE resources. A new feed-in-tariff quota of up to 187MW including 30MW each for biogas and biomass sources and 127MW for small hydropower sources was opened for bidding in August 2022.

Strong Earnings-growth Prospects

Samaiden’s FY23E core PER of 12x is attractive given the 2-year core EPS CAGR of 46% for FY22-24E. After the cut in our 2023E fully-diluted core EPS and applying an unchanged target PER of 24x, we trim our 12-month TP to RM1.00, from RM1.03. Samaiden remains our conviction BUY call. Downside risks: (1) higher solar PV panel cost; (2) project execution risks; and (3) slow replenishment of its order book.

Source: Affin Hwang Research - 1 Sept 2022