Pekat Group Berhad (Pekat) has been awarded a RM115 million engineering, procurement, construction, and commissioning (EPCC) contract for a solar power plant under the Corporate Green Power Programme (CGPP). The project, located in Kinta, Perak, will involve the construction of a 29.99MWac solar photovoltaic (PV) plant. The project is expected to commence in the fourth quarter of 2024 and reach completion by the end of 2025, aligning with the Energy Commission's regulations for CGPP power plants. Pekat Solar Sdn Bhd, an indirect subsidiary of Pekat, accepted the letter of award from MF Solar Tronoh Sdn Bhd, itself a subsidiary of Mega First Corporation Berhad.
MIDF Stock Broking House have maintained a BUY call for Pekat Group Berhad, citing the RM115 million solar power plant project as a significant boost to the company's order book, which now stands at RM320 million. The target price remains unchanged at RM1.32, with analysts forecasting a 39.7% potential return on share price. The contract win is viewed as a key factor in sustaining Pekat's future earnings, with no changes made to the current earnings estimates. Analysts also note the promising outlook for Pekat, driven by the expansion of rooftop solar projects, as well as the company's continued involvement in CGPP projects and growing job flows from its earthing and lightning protection (ELP) division.
The solar plant project marks Pekat's first CGPP EPCC contract and is expected to contribute significantly to the company's financial performance through to 2025. In addition to this contract, Pekat is eyeing another CGPP EPCC project with a 10MW capacity, which could bring in an additional RM38 million. The growing demand for data centres, which require robust ELP systems, further strengthens Pekat's business prospects, as the company is currently involved in providing ELP systems for 10 data centres.
Pekat's future growth is also supported by national energy policies, including the National Energy Transition Roadmap (NETR) and the upcoming Large Scale Solar 5 (LSS5) initiative. Moreover, the company's proposed acquisition of EPE Switchgear is expected to enhance its capabilities in power distribution equipment and allow it to penetrate new foreign markets. This acquisition is projected to have a positive impact on Pekat's bottom line starting from the financial year 2025.
