KUALA LUMPUR: Solar engineering, procurement, construction and commissioning (EPCC) players such as Solarvest Holdings Bhd and Samaiden Group Bhd are expected to be the biggest beneficiaries of the Large Scale Solar 4 (LSS4) programme, Kenanga Research said.
Last Friday, the Energy Commission released the list of 30 shortlisted bidders for the LSS4, with prices ranging from RM0.1768 per kilowatt hour (kWh) to RM0.2481 per kWh for a total awarded capacity of 823.06 megawatts (MW) out of the 1 gigawatt offered.
This was selected and filtered down from a total of 138 bids submitted last year.
Kenanga Research said Solarvest was expected to secure 200MW-300MW capacity of EPCC jobs from LSS4 alone, which would immensely boost its current order-book of RM197 million.
Samaiden, meanwhile, should be able to at least secure 100MW of EPCC jobs from LSS4, boosting its current order-book of RM185 million.
"We expect LSS4 EPCC to fetch roughly low-teens gross margins.
"Moving forward, in tandem with the government's target of reaching 20 per cent renewable energy use in Malaysia by 2025 (from two per cent currently), we believe further iterations of the LSS programme could still be possible.
"As solar still remains the biggest driver of new renewable energy capacity in Malaysia, increased participation in other government-related programmes are also likely.
"Furthermore, the award of LSS4 also further confirms the down trending cost of solar energy," Kenanga Research said in a repory today.
The firm said other shortlisted Bursa-listed companies within its coverage included Tan Chong Motor Holding Bhd, Tenaga Nasional Bhd and Uzma Bhd.
It said based on rough guesstimates, market rates for project internal rate of returns should be within the mid- to-high single-digit range, with capital expenditure ranging from RM3 million to RM4 million per MW, of which more than 60-70 per cent were EPCC costs, with the remainder being land costs.