Sunview a beneficiary of Malaysia’s RE commitment
04 Oct 2022
Sunview Group Bhd (Sunview) is expected to benefit from Malaysia’s renewable energy commitment given its expertise in the construction of solar photovoltaic (PV) systems, analysts observed.
Sunview, which is en route to listing on the Ace Market of Bursa Malaysia on October 17, is a renewable energy turnkey EPCC service provider that offers end-to-end solutions in building solar photovoltaic systems from scratch. It also provides subcontracting services, owns solar assets and offers associated products and services.
In a report, the research team at RHB Investment Bank Bhd (RHB Investment) noted that Sunview was previously (and mainly) a sub-contractor for solar EPCC jobs, but has transformed itself into becoming an EPCC contractor in its own right.
Currently, the group derives the bulk of its revenue by providing EPCC services on utility-scale large-scale solar (LSS) projects, and solar PV facilities for commercial and industrial (C&I) clients.
It also owns solar PV facilities on clients’ rooftops, and operates them for a fixed concession period under power purchase agreements (PPA). Currently, it owns 18 solar PV facilities with a collective installed capacity of 7.74MWp, which should generate a recurring revenue base of circa RM3 million (four per cent of FY22 revenue).
The group plans to add an installed capacity of 0.38MWp in FY23, and looks to continue building or acquiring more solar assets, using a mix of equity and debt funding.
“As the government is targeting for 31 per cent of Malaysia’s installed capacity to be made up of RE by 2025, these efforts will likely translate to more of such projects that Sunview can capitalise on.
“With a reputable track record and its soon-to-be listing status, it is well-positioned to win more LSS contracts, in our view.
“The group should also benefit from the growing demand for solar PV facilities from C&I clients, fuelled by growing ESG awareness and desire for a higher RE mix to be ESG-compliant, and potential cost savings from using solar, given the possible hike in electricity tariff rates in 2023.
“Sunview also aims to venture into the EPCC of biogas facilities in the near future,” RHB Investment said.
Aside from that, the research team pointed out that more than 100 per cent of its yearon-year (y-o-y) earnings is expected to be driven by its strong orderbook.
“Currently, it has an unbilled orderbook of RM558 million, providing a 5.6-folds cover. We forecast three-year earnings CAGR of 29 per cent, driven by its current orderbook and future project replenishments. We also think that margins will soften in FY23F on the back of larger LSS contributions, higher solar panel prices, a stronger dollar-ringgit rate and higher labour costs,” it projected.
All in, RHB Investment is optimistic on Sunview’s performance given its relatively brighter growth prospects.
Source: The Borneo Post