KEY INVESTMENT HIGHLIGHTS

• CGPP expected to drive stronger performance in FY26
• Actively tendering for jobs with a tender book size of RM2.4b
• PPA for development of 600MW solar plants being negotiated
• Maintain BUY with an unchanged TP of RM0.64

A crowded year underpins order book growth. The Corporate Green Power Programme (CGPP) and the upcoming fifth cycle of the Large-Scale Solar (LSS5) are among the two main renewable energy schemes in 2025.

For solar EPCC companies such as Sunview, this means that the opportunities for order book replenishment are aplenty, which should keep them busy throughout 2025 and 2026.

RM500m of CGPP tenders. As CGPP solar farms have to be completed no later than 2025 unless approved by the Energy Commission, we expect more announcements in this space towards end-2024 and in Jan-25.

Sunview has secured one EPCC contract so far, a RM51.9m package that it secured from Cenergi Solar Kuala Ketil Sdn Bhd in Sep-24. According to management, this is a free issue contract where the client will provide the solar panels, mounting structures and inverter. Sunview's role is mainly for the installation and procurement of other items such as interconnection equipment and cables. The group currently has RM500m of CGPP tenders.

Actively tendering for projects. Other than the CGPP, Sunview is also actively participating in tenders, with a total tender book value of RM2.4b, including CGPP. This comprises RM1.8b of LSS5 tenders and RM116m of rooftop projects. We expect CGPP-related contracts to deliver an immediate boost to the group's outstanding order book of RM244.6m currently. Management is also optimistic on solar rooftop projects moving forward. About half of Sunview's 1HFY25 revenue of RM88.0m came from commercial and industrial (C&I) rooftop projects.

PPA negotiation ongoing. Recall that the group entered into a heads of terms agreement in Jul-24 with Uzbekistan via the Ministry of Energy to develop two solar PV plants with a size of 600MW. They are currently negotiating the power purchase agreement (PPA) with the ministry, on top of the land lease and transmission agreements. The group recently incorporated a new wholly owned subsidiary there, known as Sunview Centraziya LLC. Management hopes to sign the PPA by Jan-25.

Earnings estimates. We are maintaining our earnings estimates.

Target price. We are also keeping to our TP of RM0.64 as we peg Sunview's FY26F EPS of 2.8 sen to a forward PER of 23x, at a slight discount to its larger peers.

Maintain BUY. We expect Sunview's prospects moving forward to be driven by the rising demand for rooftop solar, EPCC projects from CGPP and the upcoming 2GW LSS5. Prospects for solar EPCC players remains bright, with favourable policies such as the National Energy Transition Roadmap (NETR) and the recent announcement under Budget 2025 with an allocation of over RM300m for the National Energy Transition Facility Fund, up from RM100m in 2024 to fuel additional green energy projects. All factors considered; we maintain our BUY recommendation on Sunview.

Source: MIDF Research - 5 Dec 2024