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KUALA LUMPUR (March 15): Renewable energy players rose today after winning bids for the fourth cycle of the large-scale solar program (LSS4).
At 10:52 am, Advancecon Holdings Bhd gained 1.5 sen or 3.85% at 40.5 sen; Solarvest Holdings Bhd gained 3 sen or 1.07% to RM2.84; MK Land Holdings Bhd increased by three sen or 14.29% to 24 sen.
Meanwhile, Tan Chong Motor Holdings Bhd grew eight sen or 6.78% to RM1.26; JAKS Resources Bhd rose 2.5 sen or 3.47% to 74.5 sen; KPower Bhd advanced three sen or 1.35% to RM2.25.
Ranhill Utilities Bhd also rose 4.5 sen or 5.26% to 90 sen, while Gopeng Bhd rose 19.5 sen or 29.32% to 86 sen and Uzma Bhd rose eight sen or 10.6% to 83.5 sen.
Last Friday, the Energy Commission released the list of 30 shortlisted LSS4 bidders, with prices ranging from 17.68 sen / kWh to 24.81 sen / kWh, for a total awarded power of 823.06MW of the 1,000 MW offered.
Advancecon, Solarvest, MK Land, Tan Chong Motor, JAKS Resources, KPower, Ranhill Utilities, Gopeng, Tenaga Nasional Bhd and Uzma are among the identified listed companies that have been shortlisted for the projects.
Kenanga Research in a note today said that based on its rough estimates, market rates for the project’s internal rate of return should be within the mid to high single-digit range, with capital expenditures ranging from RM3 million to RM4 million per MW. of which more than 60-70% are engineering, procurement, construction and commissioning (EPCC) costs, and the rest correspond to land costs.
“Overall, we identify the EPCC solar stakeholders (eg Solarvest, Samaiden Group Bhd) as the biggest beneficiaries of the LSS4 program.
“Solarvest is expected to insure around 200-300MW, while we believe Samaiden should be able to insure at least 100MW,” he said.
Kenanga also expects LSS4 EPCC to make roughly teenage gross margins.
“Going forward, coupled with the government’s goal of reaching 20% renewable energy use in Malaysia by 2025 (from about 2% today), we believe that further iterations of the LSS program might still be possible,” he said.
As solar power remains the main driver of new renewable energy capacity in Malaysia, participation in other government-related programs is also likely to increase, Kenanga said.
“The LSS4 award also further confirms the downward trend in the cost of solar energy,” he said.
Read also:
These listed companies win the LSS4 project tender
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