KEY INVESTMENT HIGHLIGHTS

• RM52m maiden EPCC job for a 14MW CGPP solar plant in Sungai Petani, Kedah
• A related party transaction by virtue of GMD and ED's shareholdings; to seek shareholders' mandate
• Outstanding order book has risen to RM365.5m
• Maintain BUY with an unchanged TP of RM1.57

Maiden CGPP contract. As the Corporate Green Power Programme (CGPP) jobs start flowing in, Samaiden has been awarded its maiden EPCC job for the scheme, a RM52.0m contract to build a 14MWac large scale solar photovoltaic (LSSPV) power plant in Sungai Petani, Kedah. The group's wholly owned subsidiary Samaiden Sdn Bhd accepted a letter of award from Legasi Green Power Sdn Bhd (LGP).

Project details. The job scope includes the design, supply, delivery, installation, testing and commissioning for the LSSPV power plant. This is expected to be completed within 12 months by 30th August 2025, in order to achieve the scheduled commercial operation date (COD). We expect between mid to high single digit pretax margin for the project.

Related party transaction. LGP is a consortium comprising Angelaxy Power Sdn Bhd (30%), Asanaga Sdn Bhd (30%) and Greenviro Solutions Sdn Bhd (40%). Angelaxy Power is wholly owned by Datuk Ir Chow Pui Hee while Asanaga Sdn Bhd is wholly-owned by Fong Yeng Foon. Chow and Fong are the group managing director and an executive director respectively, of Samaiden Group. Both are also substantial shareholders of Samaiden Group. As this is regarded a recurrent related party transaction (RRPT), Samaiden will seek its shareholders' mandate at its upcoming 5th AGM.

Strengthening order book. With the new win, Samaiden's outstanding order book has risen to RM365.5m. We understand that Samaiden is eyeing at least 80MW more of EPCC jobs for CGPP, which translates into a potential RM240m-320m incremental orderbook.

Earnings estimates. We are maintaining our earnings estimates unchanged.

Recommendation. We are positive on Samaiden's first CGPP EPCC win, and we believe that there are more jobs to come, with more announcements expected in 4QCY24. 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. Balance sheet remains strong with a net cash position of RM122.3m, underpinning near-term growth prospects.

Source: MIDF Research - 1 Oct 2024