Sunview Debuts On ACE Market

BUY with a TP of RM0.50 based on 15x PER (50% discount to Bursa Malaysia Technology Index 5 years average given its smaller market capitalisation ) over FY3/23 EPS.

Sunview Debuts On ACE Market
Photo by Sungrow EMEA / Unsplash

Sunview Group (Sunview) made its debut on Bursa ACE Market of Bursa Malaysia on Monday (Oct 17) at 59.5 sen, a 105.1% premium to its initial public offering (IPO) issue price of 29 sen.

The company is involved in the engineering, procurement, construction and commissioning (EPCC) of solar photovoltaic (PV) other renewable energy (RE) facilities, provision of solar PV construction and installation services, and associated services and products.

Sunview’s FY3/19-FY3/22 net earnings grew by more than 300% CAGR thanks largely to several strong EPCC job wins.

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Sunview has an unbilled orderbook of RM558.3m as of 30 August 2022, which provide great earnings visibility over the next 2 years. We forecast Sunview to register net earnings of RM15.7m and RM19.3m for FY23 and FY24 representing 77% and 23% growth respectively.

Sunview: BUY

BUY with a TP of RM0.50 based on 15x PER (50% discount to Bursa Malaysia Technology Index 5 years average given its smaller market capitalisation ) over FY3/23 EPS.

To date, the company Completed 98 EPCC of rooftop solar PV facility projects covering residential, commercial and industrial developments with a cumulative installed capacity of 23.08 megawatt peak (MWp). Sunview is planning to build 2 new solar PV facilities in Klang with a total planned capacity of 0.38MWp which is scheduled to commence operations of 1QCY23. Additionally, the company is actively tendering for new projects with orderbook replenishment of between RM150m-RM200m per annum.

Leverage on current expertise, Sunview is expanding into other renewable energy facilities and complementary products namely biogas plants which is designed to generate electricity by using waste materials such as agricultural waste. So far, Sunview has received customer enquiries and has engaged in preliminary discussions with a prospective customer for a biogas plant.

The company is also looking for opportunity to provide complementary products including IoT solar energy system and current limiting reactor system for solar PV power applications. IoT solar energy system consists of components including a data logger and sensors with are designed to capture generation and consumption of electricity. The system will provide real time data analytics, performance ratio analysis and monitoring.

The Ministry of Energy and Natural Resources is committed to the use of renewable energy for power generation with a target of 31% of total installed capacity in Malaysia by 2025 and 40% by 2035 under the Malaysia’s Energy Transition Plan. We believe the growing industry will provide huge opportunity for Sunview.

Balance sheet is manageable with net gearing of 0.6x as at FY3/22. Post listing, gearing will be reduced to almost zero as IPO proceeds will be utilised for repayment of borrowings, business expansion and working capital requirements. The company does not have a fixed dividend policy.