Review

• Samaiden reported a core net profit of RM4.5mn for its 1QFY25, which accounted for 18% and 21% of our and consensus’ full year estimates respectively. We deem the results in-line, as we expect earnings to strengthen further in the upcoming quarters as recognition of CGPP projects kick in. To recap, two of three CGPP projects was secured by Samaiden in Sep and Oct 2024 with targeted COD by Aug and Sep 2025 respectively.

• YoY: Excluding a RM1.2mn one-off expense related to the establishment of the group’s Islamic Commercial Paper and Islamic Medium-Term Note, 1QFY25 core net profit rose +66.5% YoY. This came on the back of higher revenue (+7% YoY) due to higher work progress. In addition, core net profit margin rose +3.3ppts to 9.2% during the period due to higher margins generated from the current mix of on-going projects.

• QoQ: On sequential basis, core earnings rose +8.7% QoQ against a record high base in 4QFY24, despite a 13.7% QoQ contraction in revenue. This is due to completion of most LSS4 projects (which generated lower margins) and higher margins generated from the current mix of ongoing projects in the C&I and utility scale solar segments, which includes the 50MWac NUR Power solar power plant targeted for COD by Mar 2025. Additionally, we believe SAMAIDEN benefited from declining solar module prices, which was not reflected in LSS4 projects previously as costs were locked in much earlier.

Impact

• No change to our earnings forecast.

Outlook

• Orderbook has risen to a record high of RM521.2mn (slightly higher than our earlier estimate of RM510mn) mainly boosted by the group’s latest 30MWac CGPP contract win. We estimate CGPP contracts now account for 40% of total orderbook while other utility scale solar projects account for14%. Bioenergy, C&I and other projects account for the remaining. SAMAIDEN’s enlarged orderbook now represents some 2.3x multiplier against its FY24 revenue.

• Meanwhile, EPCC tenderbook has risen an estimated RM1.6bn. More than half comprise utility scale solar projects, which includes LSS5 project bids. To recap, LSS5 entails a record high capacity auction of 2000MW, which translates into estimated total EPCC value of RM7bn. SAMAIDEN is targeting to at least maintain a 10% EPCC share in LSS5, which translates into an incremental RM700mn orderbook expansion should it materialise. LSS5 winning bids are expected to be announced by year-end (a slight delay vs. the earlier indicated November announcement), whereas LSS5 EPCC contracts are expected to start trickling in from mid-CY25 onwards

• Solar module prices remain depressed having fallen -64% off 2021-peak levels to the current range of ~USD0.10/watt given overcapacity in China. Any further protectionist measures by the Trump administration against Chinese and Southeast Asian modules will further exacerbate the situation. This is a silver lining for downstream players in the solar EPCC and asset ownership space. We believe the benefits of cheaper module cost will be reflected in the upcoming CGPP and LSS5 projects.

Valuation

• Re-affirm Buy on SAMAIDEN at a higher TP of RM1.43 (from RM1.30 previously) as we rollover our valuation base to CY25F. SAMAIDEN is one of the prime beneficiaries of an upcycle in RE plant-up underpinned by record high orderbook, strong net cash position and secured pipeline of RE assets to boost recurring income.

• From a valuation standpoint, SAMAIDEN is trading at just 19.4x/14.9x FY25/FY26 PER (FYE June), at a discount to historical mean PER of 20x. We see room for valuations to re-rate higher towards +1SD (25x PER) on the back of more aggressive RE plant-up domestically backed by the National Energy Transition Roadmap and an increasingly liberalised domestic RE market.

• Key catalysts: (1) Further award of CGPP EPCC contracts. (2) Outcome of LSS5 bidding in December 2024 and EPCC contract awards thereafter. (3) CRESS project awards. Key risks are a sharp rise in raw material cost such as solar module and delays in project implementation.

Source: TA Research - 2 Dec 2024