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Another EPCC job win

Maintain HOLD

Solarvest has won a MYR46.7m EPCC contract for a 50MW LSS at Bukit Selambau, Kedah. This is its fifth EPCC job win for LSS4 to-date, which lifts its outstanding orderbook to a high of MYR629m. No change to our earnings forecasts as it falls within our orderbook replenishment assumption. Maintain HOLD with an unchanged 1x PEG TP of MYR1.45 (32% earnings CAGR over the next 3 years).

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Secured MYR46.7m EPCC job for TNB

Solarvest has been awarded as EPCC sub-contractor to develop a 50MW LSS for TNB Engineering Corporation Sdn Bhd in Kedah worth MYR46.7m. The job scope covers design, engineering, erection, testing, commissioning and performance guarantee of the solar farm facilities. Works are expected to be completed by 1Q of 2023.

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Orderbook at an all-time high

This latest job win will bring Solarvest’s outstanding orderbook to a high of MYR629m, or 2.8x FY21’s revenue. Assuming a net profit margin of 8%, we forecast a net profit contribution of MYR3.7m into FY22-23E. YTD, Solarvest has won five EPCC jobs for LSS4 amounting to MYR418m to be completed by 2023. We currently assume MYR300m/400m job wins in FY22E/23E.

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No changes to our forecasts

Given that the orderbook replenishment falls within our assumption, we made no changes to our earnings forecasts. Moving forward, we expect earnings growth to be driven mainly by turnkey EPCC from the LSS4 and Net Energy Metering (NEM) projects. Solarvest currently trades on 40x FY22E PER, compared to its peers at 13.5x.