KUALA LUMPUR: The prospects of the renewable energy (RE) sector in Malaysia are strong, backed by the government's commitment towards RE making up 70 per cent of generation capacity mix by 2050, Kenanga Research said.
Hence, the firm has initiated coverage on Solarvest Holdings Bhd, a leading photovoltaic (PV) system contractor which is building a portfolio of PV assets for recurring incomes.
"Backed by strong fundamentals, we project Solarvest's earnings to grow by 53 per cent and 67 per cent in FY24-2, respectively. We initiate coverage on Solarvest with an "Outperform" call and targetprice of RM1.47," Kenanga Research said today.
The firm noted that the recently-announced National Energy Transition Roadmap (NETR) lays down the pathway for Malaysia's transition to RE with a target of RE making up 70 per cent of generation capacity mix by 2050.
] "We foresee solar to account for more than 90 per cent of the new RE capacity (more than 20GW) in Malaysia, backed by various initiatives including Feed-in Tariff programme, Net Energy Metering mechanism, large-scale solar and Corporate Green Power Programme.
"Furthermore, the lifting of the export ban on RE and the establishment of a central electricity exchange operated by a single-market aggregator to ensure pricing transparency will provide additional growth impetus to the local RE sector," it added.
Kenanga Research said Solarvest has completed PV systems in LSS and rooftop solar (residential, commercial and industrial sectors) with a cumulative capacity of more than 1000MWp.
It is also building a portfolio of PV assets for recurring incomes and has made some inroads into regional markets, i.e. Taiwan, the Philippines and Singapore.
"Solarvest has a strong clientele with multinational companies, public listed companies and reputable private firms such as Dexcom, Nefin Group, Behn Meyer, Lotus's, Petronas, Chin Hin,
Beshom and NTPM," it added.