Samaiden gets profit enhancement via new RE jobs
PETALING JAYA: Samaiden Group Bhd 's recent contract wins in the renewable energy (RE) sector indicate a potential 20% enhancement to its annual earnings and a 10% valuation enhancement once all three projects come online.
In a report, TA Research said under the latest Feed in Tariff (FiT) 2.0 bidding cycle, Samaiden secured contracts to develop three new bioenergy power generation plants with aggregate gross capacity of 18MW.
The three contracts that were won separately include a 1.5 megawatt (MW) biogas plant in Bachok, Kelantan, a 5.5MW biomass plant in Tangkak, Johor and a 11MW biomass plant in Kemaman, Terengganu.
TA Research said the positive trajectory for Samaiden's earnings and valuation is based on a high single-digit pooled internal rate of return and a capital expenditure (capex) of circa RM10mil per MW.
All three assets are expected to be commissioned by July 25, 2028 and will operate under the 21-year RE power purchase agreement.
The research house estimated a gross aggregate capital expenditure of RM171mil for the upcoming FiT assets.
'The gross equity portion of the capital expenditure capex, estimated at RM34mil, should be manageable considering the group's financial year 2027 (FY27) gross cash of RM120mil,' TA Research pointed out.
The research house added it would make no changes to earnings projections as the assets are only expected to come onstream in FY29.
It said it maintained a 'buy' call with an unchanged target price of RM1.38
'We continue to like Samaiden as one of the key beneficiaries of an upcycle in RE plant-up, underpinned by a solid order book, strong net cash position and secured pipeline of RE assets to boost recurring income,' it said.
TA Research said some of the catalysts include Samaiden's Large Scale Solar 5 (LSS5) and LSS5+ engineering, procurement, construction and commissioning contract awards as well as its Corporate Renewable Energy Supply Scheme.
The research house noted the generation asset wins under LSS5+ and CRESS are also catalysts.
Meanwhile, TA Research said risks include a sharp rise in raw material costs such as solar modules and delays in project implementation.
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