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CFM’s EV pact with Thailand’s Energy Absolute earnings-accretive in long run, says Valuevest

CFM’s EV pact with Thailand’s Energy Absolute earnings-accretive in long run, says Valuevest

06 Mar 2023

Computer Forms (Malaysia) Bhd’s (CFM) partnership with  Energy Absolute Thailand to produce and sell electric vehicles (EV) will contribute to its earnings in the long run, said Valuevest Ventures.

CFM would benefit from new opportunities following the government’s implementation of a policy to reduce fossil fuels consumption and increase EV usage by up to 37 per cent by 2040, the research firm said.

CFM and Energy Absolute recently announced plans to distribute EVs such as e-buses, e-cars, e-trains, e-bikes, e-boats, and EV chargers in Malaysia.

Through a joint venture company called Energy Absolute Malaysia Sdn Bhd (EA Malaysia), CFM and Energy Absolute, together with other shareholders, will also set up a RM5 billion manufacturing plant here to handle EVs and renewable energy projects. 

EA Malaysia is currently fully-owned by CFM. But the shareholding structure will eventually see CFM reducing its stake to 40 pe rcent, while Energy Absolute will have 40 per cent, Datuk Wira Justin Lim Hwa Tat will own 10 per cent and the remaining 10 per cent by other Thai investors.

Valuevest has initiated a coverage on CFM with a “Buy” call and a target price of RM3.60, representing a 53.19 per cent upside potential based on the positive impact of the joint venture.

The firm believes that CFM’s positive global growth in its major operating sectors will benefit its earnings in the long run.

Energy Absoluite’s interest in supporting, investing and promoting the pilot project along with CFM to become an Asian leader in energy storage was acknowledged by Prime Minister Datuk Seri Anwar Ibrahim, it said.

Meanwhile, Energy Absolute also proposed to replace ageing Polis Diraja Malaysia vehicles with EVs to reduce carbon emissions. 

“We believe that the successful collaboration between the government and Energy Absolute will have a significant impact and create foundations for relationships to help solve problems in the future.” it said.

Source: NST