Solarvest expects solar assets to yield attractive, long-term returns

SOLAR photovoltaic (PV) system specialist Solarvest Holdings Bhd is optimistic of its capabilities to fulfill the requirements of the Large Scale Solar @ MEnTARI (LSS4) project backed by its robust financial strength.

The group recently raised a total of RM38.7 mil from the issuance and private placement of 32 million new shares at an issue price of RM1.21/share which boosted its cash in hands to RM80.3 mil.

Solarvest, which provides turnkey engineering, procurement, construction and commissioning (EPCC) services for solar PV systems, is currently in net cash position of RM64.3 mil with a low gearing ratio of 0.1 times as of end-December 2020.

On Friday, Solarvest (via its wholly-owned Atlantic Blue Sdn Bhd) was shortlisted by the Energy Commission as one of the successful bidders of the LSS@Mentari programme to provide cumulative capacity of 50 megawatts (MW) of solar-powered electricity via three large-scale solar farms.

Of its three shortlisted bids, the largest solar farm has a capacity of 25MW which will be based in Manjung, Perak. This is followed by a 13MW solar farm to be constructed in Kuala Selangor and another 12MW solar farm in Manjung, Perak.

Barring any unforeseen circumstances, the solar plants are expected to be operational by end of 2022 and 2023. Upon completion of the solar plants, Solarvest expects its annual earnings contribution to be circa RM8 mil to RM9 mil from the three solar farms.

This recurring income will contribute positively to the financial performance of Solarvest during the entire tenure of the 21-year power purchase agreement which is expected until year 2043.

“This will open up potential recurring income stream for us that will significantly boost our earnings visibility in the long run,” commented Solarvest group CEO Davis Chong Chun Shiong.

“We are looking for more investment opportunities for large-scale solar projects in both the domestic and overseas market such as Taiwan to expand our portfolio of solar assets.”

Moving forward, the company expects its solar assets to yield attractive returns as the cost of construction will be relatively controlled given it is able to construct the power plants itself.

“In addition to rising domestic demand, we are seeing utility companies joining forces to pave way for cross-border electricity distribution. Hence, we believe the export of clean energy will be the next key driver for growth in Malaysia,” projected Chong.

“Our aim is to expand our solar asset portfolio to be one third of the group’s total revenue in three to five years.”

Aside from being a bidder, Solarvest is also bidding for EPCC projects from other successful bidders in the LSS@Mentari programme.

The company aims to clinch about 300MW of EPCC projects valued around RM600 mil to RM700 mil which will boost its financial performance in FY2021 till FY2023. – March 15, 2021

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