Market analysts hail Samaiden Group Berhad (Samaiden) for its first Renewable Energy (RE) contract win for the current financial year (FY2024/25), as the group anticipates more contracts along the green energy path.
Kenanga has awarded an OUTPERFORM rating and a target price of RM1.51 for Samaiden, acknowledging the group's first contract win in the financial year to end June 30,2025 (FY2024/25).
Meanwhile, RHB has reiterated its BUY call and upgraded the target price to RM1.33, also viewing positively the group's first contract win that reflects its strong position in the solar energy field.
As at 4:07pm on Tuesday (October 1), Samaiden's stock traded at RM1.06. (Stock updates from )
The EPCC (Engineering, Procurement, Construction and Commissioning) contract from Legasi Green Power Sdn Bhd involves the development of a 14-Megawatt (MW) large-scale solar (LSS) power plant in Sungai Petani, Kedah. The project, part of the Corporate Green Power Programme (CGPP), is expected to be completed by Q3CY2025.
This is the first key job win in FY2024/25 for Samaiden, boosting its outstanding order book by over 15% (Kenanga: 16%; RHB: 17%) to RM365.5m as it is on track to achieve its annual job win target of RM210m.
Given that CGPP projects typically offer higher Internal Rate of Return (IRR), the gross profit margin is estimated to be in the range of 14%-16%.
IRR is the expected compound annual rate of return that will be earned on a project or investment, often viewed as the discount rate that makes the net present value (NPV) of a project zero.
In the immediate term, analysts expect a strong influx of job opportunities driven by the 800MW CGPP with an end-2025 completion deadline and an additional 500MW quota under the New Energy Metering (NEM) initiative.
Samaiden is expected to stand a strong chance to secure around 10%, or RM240m, of the RM2.4b EPCC jobs under CGPP initiative.
According to RHB sources, Samaiden previously indicated its intention to secure at least 100MW of EPCC jobs under CGPP, in addition to its 43.3MW gross assets under the programme.
