KUALA LUMPUR: RHB Investment Bank (RHB Research) has raised its target price for Samaiden Group to RM1.62 per share after the company was shortlisted for Malaysia's Large-Scale Solar (LSS) 5 programme.
The firm said the short list cements its role as a significant player in the solar energy sector.
RHB has reaffirmed its Buy rating on Samaiden Group, raising its target price (TP) to RM1.62 from RM1.33, implying a 24 per cent upside, and a projected 2 per cent yield for FY25.
The Energy Commission notified Samaiden of its short list for the development of a 99.99MW large-scale solar photovoltaic (LSSPV) plant in Pasir Mas, Kelantan on Monday.
The plant is slated for commercial operation by October 11, 2027, with a 21-year power purchase agreement (PPA) to supply electricity to Tenaga Nasional Berhad.
While exact financial details such as tariffs and capital expenditures are still pending, RHB estimates that the project could contribute an average annual net profit of RM16 million, assuming a project internal rate of return (IRR) of 8 per cent and RM2.3 million per MW in capital expenditure.
"However, we are aware that this will likely put the group in a net debt position," RHB said in a note.
Meanwhile, RHB anticipates that Samaiden will capitalise further on opportunities arising from the LSS5 programme.
Following the notification of shortlisted bidders, engineering, procurement, construction, and commissioning (EPCC) contracts for LSS5 projects are expected to be awarded starting in the second half of 2025.
Furthermore, Samaiden aims to secure at least 10 per cent of the available opportunities in this space, which could translate to projects totalling at least 2GW of capacity.