Samaiden sees soft patch in 1Q, prospects remain intact — Analysts

Samaiden recorded a soft 1QFY23 but analysts are confident that the group’s prospects remain intact, driven by rising demand for solar power. — Bernama photo

 

KUCHING: Samaiden Group Bhd (Samaiden) recorded a soft first quarter of the financial year 2023 (1QFY23) but analysts are confident that the group’s prospects remain intact, driven by rising demand for solar power.

In a report, the research team at Kenanga Investment Bank Bhd (Kenanga Research) noted that Samaiden’s 1QFY23 core net profit came in at RM2.4 million.

However, it pointed out that its earnings were lifted from higher EPCC works. 1QFY23 core net profit jumped 19 per cent y-o-y, in tandem with the stronger revenue, thanks to greater EPCC works done during the quarter.

This was partially offset by the poorer margins (gross margins fell to 14 per cent, from 18 per cent last year) amidst poorer job margin mix from LSS projects.

Nevertheless, the research team said: “We like Samaiden for its huge market share – second largest in the high-growth local solar EPCC market, ability to provide end-to-end services, including securement of financing – of which many smaller names are unable to do so, and outstanding track record of project execution and delivery within the space.”

It pointed out that Malaysia’s renewable energy (RE) space is largely dominated by solar.

“We foresee more than 90 per cent of upcoming new RE capacity to be solar powered. Anchored by continued government-led programmes, Malaysia is targeting RE to make up 31 per cent of total power generation capacity by 2025, and 40 per cent by 2035.

“Samaiden currently has an orderbook of RM325 million, which will keep it busy for the next three years,” it added.

All in, Kenanga Research maintained its ‘outperform’ rating on the stock.

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