KEY INVESTMENT HIGHLIGHTS

• FY24 core earnings grew +52%, exceeding our forecast by 12.7%
• Outstanding order book of RM313.5m
• Strong orderbook expansion prospects driven by CGPP, LSS5 and NEM programs
• Maintain BUY with an unchanged TP of RM1.57

Exceed expectations. Samaiden's 4QFY24 net profit grew +62.0%yoy to RM5.8m, bringing the FY24 net profit to RM16.0m (+52%). The stronger performance was driven by large-scale solar projects and the higher margin commercial and industrial (C&I) jobs. This came in above our estimates by 12.7% but within consensus, exceeding forecasts by 4.4%.

Key takeaways. The stronger quarterly earnings came on the back of a +26.5%yoy jump in revenue to RM57.2m. Sequentially however, revenue came off -23.7%qoq as most of the group's LSS4 projects are near completion. Nevertheless, PAT came in stronger by +41.4%qoq, attributable to favourable profit margins of ongoing projects. Outstanding orderbook stood at RM313.5m as at end-June 2024, which will keep the group busy over the next three years.

Replenishment prospects. Prospects remain bright for replenishment given the upcoming EPCC tenders for the 800MW quota allocated under the Corporate Green Power Program (CGPP). We understand that Samaiden is eyeing at least 100MW of EPCC jobs for CGPP, which translates into a potential RM300-400m incremental orderbook. Further out, the upcoming 2GW LSS5 (bidding opened in April 2024) and 400MW additional Net Energy Metering quota for CY24 (offered from 5th February 2024) cements future orderbook replenishment outlook.

Collaboration with Gruppe. Recall that in Jun-24, the group entered into a collaboration with Gruppe Lightning Solution Sdn Bhd to explore opportunities surrounding solar street lighting, efficiency and other renewable energy related services and solutions in the Southeast Asia region. This provides further opportunities for jobs replenishment.

Earnings estimates. We are keeping to our FY25F earnings estimates for now, which projects a +41.2% increase in core earnings to RM22.6m.

Recommendation. We maintain our SOP-derived TP of RM1.57. We continue to value the group's EPCC business at 26x PER, at a slight discount to industry leader Solarvest. We maintain our BUY call on Samaiden being one of the key beneficiaries of EPCC prospects under the CGPP and the long-term RE growth potential from the National Energy Transition Roadmap. Its balance sheet remains strong with a net cash position of RM122.3m, underpinning near-term growth prospects.

Source: MIDF Research - 30 Aug 2024