KUALA LUMPUR: Samaiden Group Bhd and Solarvest Holdings Bhd stand to be the key beneficiaries in bagging the government’s battery energy storage system (BESS) pilot project that was recently announced.
Hong Leong Investment Bank Bhd (HLIB Research) is conservatively estimating solar engineering, procurement, construction and commissioning (EPCC) opportunities of about RM7 billion from large-scale solar (LSS) competitive bidding program or LSS5 alone, and quota winners could be announced by the first half (1H) of 2025.
“We like the sector riding on strong structural themes as well as a positive earnings growth cycle,” HLIB Research said in a recent note.
To recap, Energy Transition and Public Utilities minister Datuk Sri Fadillah recently announced a cumulative 2.8 gigawatt (GW) of new renewable energy (RE) quotas and 400 megawatt hour (MWh) of BESS pilot project.
After making the RE’s intentions clear in the National Energy Transition Roadmap (NETR), the slew of programmes announced form a tangible step in that direction.
The key highlight was the comeback of LSS5 with a significantly upsized 2GW quota, HLIB Research noted.
“Overall, we view the cumulative 2.8GW of new RE quotas through various programmes, as significantly uplifting for the sector and both stocks under coverage.
“This sets in motion the government’s 2050 70 per cent RE share target as outlined in the NETR unveiled last year.
“In our view, the key highlight was the comeback of the LSS5 with a significantly larger quota size of 2GW, which is about 2.4x larger than LSS4 awards.
“While granular details were by and large missing, quota awards for LSS5 could come in 1H of 2025 with EPCC contracts to be formalised thereafter.
“It is unclear if foreign participation limits will still be in place as it was with LSS4 considering the increased scale.
“Nevertheless, we reckon with panel prices continuing to decline (US$11 per watt) bid tariffs could reach a new low,” HLIB Research said. The bank-backed research firm maintains an Overweight rating for the sector.
“We like the sector riding on strong structural themes as well as a positive earnings growth cycle.
“Both Solarvest and Samaiden are key winners from the slew of programmes announced.
“Key catalysts include contract rollout, fresh RE quotas and export news flow while risks are execution and slow implementation,” HLIB Research noted.
