KEY INVESTMENT HIGHLIGHTS

• 1QFY25 core earnings grew +53%yoy, in line with expectations
• Outstanding order book at a record high of RM521.2m
• Strong orderbook expansion prospects driven by CGPP, LSS5 and NEM programs
• Maintain BUY with a revised TP of RM1.69

Within expectations. Samaiden's 1QFY25 core net profit grew +53.2%yoy to RM4.5m, after stripping off -RM1.2m of one-off expenses.

The stronger performance was led by stronger margins from its ongoing EPCC projects. The result came in within expectations at 20.2% of ours and 20.9% of consensus' full-year estimates.

Key takeaways. The stronger quarterly earnings came on the back of a +7.0%yoy increase in revenue to RM49.4m. Sequentially however, revenue came off -13.7%qoq mainly due to the completion of most LSS4 projects in the prior quarter, which also led to a -42.7%qoq decline in PAT to RM3.3m. Nevertheless, we are upbeat on upcoming quarters as Samaiden's orderbook remains strong at a record high of RM521.2m, with earnings visibility up to FY26. This is expected to grow further when more CGPP EPCC jobs start to flow in and when LSS5 kicks off.

Replenishment prospects. The group has secured RM91.2m worth of CGPP EPCC contracts and we understand that it is eyeing at least 70MW more of similar EPCC jobs, which translates into a potential RM200m- 280m incremental orderbook. Further out, the upcoming 2GW LSS5 and the extension of the Net Energy Metering (NEM) 3.0 programme until 30 June 2025 cements future orderbook replenishment outlook.

Expansion into Indonesia. Recall that the group recently established a 70:30 JV in Indonesia with PT MCS Bina Energi to expand its footprint into Indonesia's RE market. The JV will be involved in both EPCC and investment of assets. They have identified several projects, and some are already in the midst of discussion.

Earnings estimates. We keep our earnings estimates unchanged.

Recommendation. We revise our SOP-derived TP of RM1.69 from RM1.57 previously as we roll forward our valuation base year to FY26.

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, LSS5 and the long-term RE growth potential from the National Energy Transition Roadmap. The balance sheet remains strong with a net cash position of RM119.8m, underpinning near-term growth prospects.

Source: MIDF Research - 2 Dec 2024