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RHB Research Positive On Samaiden’s Position In RE Sector

KUALA LUMPUR: RHB Research remains optimistic about Samaiden Group Bhd’s prospects, driven by its extensive pipeline and solid position in the renewable energy (RE) sector.

Samaiden Group Bhd group managing director Chow Pui Hee said the company will continue to bid for solar-related projects despite the growing numbers of other RE projects.

The bank-backed research firm said that with a diversified portfolio comprising solar, biogas, and biomass, it strategically contributes significantly to Malaysia’s sustainable energy initiatives.

RHB Research said Samaiden recently experienced a momentum surge, steadily
securing RE contracts one after another.

The company bagged two engineering, procurement, construction and commissioning (EPCC) contracts, namely a 50MW ground-mounted solar photovoltaic (PV) plant at Kulim Hi-Tech Park (KHTP)
and a 2MW small hydro facility at the Pelagat Forest Reserve in Terengganu.

Moreover, it managed to secure a gross total of 43.32MW capacity under the
Corporate Green Power Programme (CGPP) and a 7MW biomass power purchase agreement or PPA under the Feed-in Tariff (FiT) scheme.

“We expect these to start in the second half (2H) of 2024, providing earnings visibility for the upcoming year,” RHB Research said.

The research firm said upcoming CGPP tenders, which are set to gain traction in the next few months, will further bolster Samaiden’s FY25 activities.

According to industry players’ guidance, the tenders have been slower than anticipated, reportedly due to a Newly Enhanced Dispatch Agreement (NEDA) requirement.

Other programmes to fuel Samaiden’s growth will be the much-talked-about National Energy Transition Roadmap (NETR) and the recently announced Integrated Clean Energy (TBB) programme, which features large-scale solar (LSS5).

“The company’s recent CGPP win may help it for the LSS5 application, however, the categories it targets are likely to favour companies capable of applying for larger quotas given the 500MW capacity limit,” RHB Research noted.

RHB Research maintained a Buy call and revised the target price for Samaiden to RM1.76 as the research firm rolled forward its base year to FY25.

“There is a potential upside to our target price, which is linked to its CGPP assets, and we have yet to factor this in, given its net MW capacity is pending finalisation.

“Our target price includes a 6 per cent ESG premium based on the 3.3 environmental, social, and governance (ESG) score, which is above the 3.0 country median.

“Downside risks include discontinuing solar power incentives, competition risks, and higher-than-expected project costs,” RHB Research said.

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