Solarvest to benefit from govt’s plan to boost solar PV industry

A target is being set for electricity generated from RE at 20% of all power produced


SOLARVEST Holdings Bhd stands to potentially benefit from Putrajaya’s aim to grow the entire value chain of the solar photovoltaic (PV) industry, according to Inter-Pacific Research Sdn Bhd.

The research house has placed a target price of 49 sen on the company based on a valuation of 13 times of price earnings ratio pegged to the financial year 2020.

“The government is committed in supporting the growth of the solar PV industry by setting a target for electricity generated from renewable energy (RE) at 20% of all power produced.

“On top of that, the government provides incentives by way of lower taxes for green technology projects, income tax exemption on green technology services and tax incentives for purchase of green technology assets, all of which reduce the investment payback period,” it said in a research note yesterday.

Last month, The Malaysian Reserve reported that Solarvest aims to raise RM34.6 million from its IPO on the ACE Market of Bursa Malaysia, with the money largely for its working capital for daily operations and future projects.

The IPO entails a public issue of 98.83 million new shares with 19.5 million shares available for the public at 35 sen each.

The research house also said Solarvest currently owns a 1MW facility in Kedah and intends to own a large scale of solar PV (LSSPV) plant in the future.

“As an experienced subcontractor for LSSPV and a turnkey engineering, procurement, construction and commissioning (EPCC) contractor for three LSSPV projects in Kampar and Kamunting in Perak for Asia Meranti Group, Solarvest intends to tender for its own account as turnkey contractor in future LSSPV projects,” it said.

Inter-Pacific remains optimistic on the growth of the solar PV industry as the government intends to achieve a total installed solar PV capacity of 5,800MW by 2025.

Independent market research, Protégé forecasts the total solar PV installed capacity in Malaysia to grow from 438MW in 2018 to 3,322MW in 2023, representing a compound annual growth rate of 50%.

Solarvest is slated to be listed on Nov 26, 2019. This would be the 10th ACE Market listing for the year from a total of 23 listings in Bursa Malaysia year-to-date.

M&A Securities Sdn Bhd is the advisor, sponsor, underwriter and placement agent for the IPO exercise.

Solarvest is 45% owned by Main Market-listed Chin Hin Group Bhd. Upon completion of the IPO, Chin Hin’s shareholding will fall to 33.6%.

Solarvest specialises in turnkey EPCC services for solar PV systems. It also provides operations and maintenance services of solar PV systems.