Post update, Kenanga is reiterating its OUTPERFORM call on SAMAIDEN, albeit with a higher TP of RM0.74 (from RM0.71) after embedding the ESG rating into the valuations. Overall, the research house left the meeting with the group feeling positive on the group’s sustained contract flows and job prospects, coupled with its regional expansion plans.
Being a local solar EPCC player, the group is expected to continue to benefit from the high growth potential of RE in Malaysia. Key takeaways derived includes the position of the current order book which stands at RM358m, consisting of FY22 wins of RM340m – of which three are large scale solar (LSS) projects (cumulative contract value of RM163m and 40MW capacity), with the remainder being commercial and industrial (C&I) projects. And it is understood that the group is exploring and has the capacity of securing one additional bigger sized LSS project.
To benefit from the partnership with Chudenko. Recap that Chudenko (Tokyo-listed, market cap USD922m) emerged as
one of SAMAIDEN’s key shareholders at 15.15% earlier via private placements. SAMAIDEN is intending to leverage this
partnership to explore job opportunities from local Japanese businesses, although the project size will still be relatively small at this juncture.
As for expansion outside the country, SAMAIDEN is seeking to penetrate regionally into Vietnam, having just recently set-up a local office there, as well as into Indonesia, via its recent joint venture with Aneka Jaringan, which already has a presence there. Vietnam the second-largest electricity consumer in Southeast Asia is expected to become one of the top 10 countries globally with the highest solar energy capacity installed. Meanwhile, Indonesia accounts for 40% of the energy consumption in the region and is targeting to achieve 23% renewable energy (RE) capacity by 2025, from currently 12%.
Maintain OUTPERFORM. Kenanga raised the TP by 5% to RM0.74 (from RM0.71 previously), after embedding our 4-star ESG rating into our valuations, based on our stock ratings definition. Ascribed valuation is derived from 15x PER on FY23 EPS, in-line with peer valuation.
