Pekat lands another TNB contract, retains 'Buy' with higher target price of RM1.57
PEKAT Group Bhd has retained its 'Buy' call for its counter with a 52-week target price of RM1.57, up from RM1.30, at Phillip Securities Sdn Bhd.
In a research note released today, Phillip Securities said it continued to like Pekat for its synergistic businesses that are set to benefit from Malaysia's RE initiatives.
EPE Switchgear (M) Sdn Bhd, an indirect 60%-owned subsidiary of the company, had on May 15 received a letter of award dated May 9 May from Tenaga Nasional Bhd (TNB) for a tender submitted in relation to the supply, installation, testing, and commissioning of 33 kilovolt (kV) gas insulated switchgear & 11kV GIS and additional equipment for TNB's distribution network.
The two-year period contract is priced at RM135.24 million, inclusive of sales and service tax, Pekat said in an exchange filing on Friday.
Phillip Securities noted that this was the second long-term contract secured by EPE Switchgear in 2025, bringing year-to-date (YTD) new contract wins to RM232.5 million, well on track to meet its full-year replenishment assumption of RM240 million.
Based on EPE Switchgear's historical net profit margin of 10–12%, it estimated that the contract would contribute RM14 million to 16 million net profit (PAT) over 2025-27E.
It said the contract also suggested potential upside to EPE Switchgear's RM16 million annual profit guarantee.
The Kota Damansara, Selangor based company is a solar photovoltaic (PV) supplier as well as earth termination and surge protection systems. –TMR
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
3 days ago
- The Sun
Op Hazard 2.0: IRB to probe financial records of 57 raided e-waste premises
KUALA LUMPUR: The Inland Revenue Board (IRB) will scrutinise the financial records of 57 premises raided during the integrated Op Hazard 2.0 operation, launched on June 16 to crack down on the illegal processing of electrical and electronic waste (e-waste). IRB deputy chief executive officer (Compliance) Datuk Hisham Rusli said preliminary investigations discovered that the illegal e-waste processing factories had collectively evaded taxes exceeding RM500 million. 'Based on current information, several of the premises appear to be operated by the same owner, and we are investigating this further,' he said at a joint press conference with the director of the Bukit Aman Internal Security and Public Order Department (JKDNKA) today. Hisham said that from a taxation standpoint, illegal factories typically either fail to report their income or declare figures significantly lower than their actual earnings. 'We will thoroughly examine their financial records. What we've discovered is that these e-waste processing products are often re-exported at prices many times higher than their original value,' he said. A total of 57 premises involved in the illegal processing of electrical and electronic waste (e-waste) were raided nationwide during the three-day integrated Op Hazard 2.0 operation, with total seizures estimated at RM500 million. The breakdown of the seizures during the operation includes RM240 million worth of e-waste, RM182 million in e-waste components, and RM50 million in worn-out goods. Additionally, items linked to other offences were valued at RM32 million. The value of tax-related investigations stemming from the raids is estimated at approximately RM500 million.
The Sun
3 days ago
- The Sun
RM500 million worth of illegal e-waste seized in nationwide raid
KUALA LUMPUR: Authorities have raided 57 illegal e-waste processing premises across the country under the integrated Hazard 2.0 operation, conducted from June 16 until 2pm today, with total seizures estimated at RM500 million. Bukit Aman Internal Security and Public Order Department director Datuk Seri Azmi Abu Kassim said the operation involved the police (PDRM) in collaboration with the Department of Environment (DOE), Inland Revenue Board (LHDN), and nine other agencies. According to LHDN, the operators of these premises are believed to have evaded taxes amounting to more than RM500 million. 'The seizures include RM240 million in e-waste, RM182 million in components, RM50 million in scrap items, and RM32 million involving other offences. The estimated tax evasion amounts to RM500 million,' he told a press conference at Bukit Aman here today. A total of 916 individuals were questioned during the raids, leading to the arrest of 453 people – 382 men, 70 women, and one teenager – aged between 16 and 70. Azmi said seven of the 57 premises had valid licences to process e-waste, but the owners will still be investigated as the licences only allow for the processing of locally generated waste. He also revealed possible information leaks before the operation, which may have prompted some operators to shut down in advance. 'Initial intelligence pointed to more targets, but many premises had closed before we arrived. This raises the possibility of leaked information,' he said, adding that the Malaysian Anti-Corruption Commission (MACC) may be involved in future investigations to identify any breach. Since the first e-waste operation began on Jan 1, a total of RM5.18 billion worth of e-waste has been seized, with 1,061 arrests and 167 investigation papers opened. Azmi added that Malaysia is a signatory to the Basel Convention, which prohibits the import of electronic waste for processing. Investigations are ongoing to determine whether the seized waste was sourced locally or brought in illegally. Meanwhile, DOE enforcement director Rosli Zul said there are currently 156 licenced e-waste processing facilities nationwide, all of which are only permitted to handle waste generated domestically. 'Malaysia continues to be targeted by foreign countries for illegal e-waste disposal. To date, 600 containers have been detained at Port Klang for entering without proper authorisation,' he said, adding that port enforcement is handled by the Royal Malaysian Customs Department.
Focus Malaysia
5 days ago
- Focus Malaysia
Bullish outlook for EPCC players as RM10bil in solar projects near launch
KENANGA Research (Kenanga) believes many developers who were unsuccessful in the Fifth Large Scale Solar programme (LSS5) will pivot to LSS5+ as an alternative path for project development. Asset owners from previous LSS rounds, with proven track records, are well-positioned to benefit. 'We see strong chances for CYPARK, MALAKOF, SDG, SUNVIEW, JAKS, and SLVEST to secure awards given their previous unsuccessful bids in LSS5 and their likely continued interest in the programme,' said Kenanga. But with a likely higher Bumiputera participation this time, this should improve the chances for the former three, such as MALAKOF, CYPARK and SDG. 'Up for grabs are sizable allocations of up to 500MW, which could strain balance sheets, though this could be surmounted via Bumiputera-led joint ventures in our view,' said Kenanga. Assuming awards mirror the 100MW blocks seen in LSS5, Kenanga estimates around 15 awards remain up for grabs. With the current solar panel prices, Kenanga expects winning tariffs to land between RM0.14 per kWh and RM0.18 per kWh, supporting a project IRR of roughly 8%. Order books are hitting all-time highs as solar EPCC players race to deliver Corporate Green Power Programme (CGPP) projects before the end-2025 deadline. At the same time, 4GW worth of LSS5 and LSS5+ contracts are about to hit the market, with completions targeted by end-2027, unlocking at least RM10 bil in solar EPCC value. Kenanga projects average module prices to dip slightly as Tier-1 manufacturers flood the market. Still, with weaker solar manufacturers exiting, a price rebound is possible, though not likely in 2025. Given the low IRR of ~8% in LSS jobs and rising cost risks, Kenanga remain bullish on EPCC contractors over asset owners. 'In this space, we see market leader SLVEST stands out as a key beneficiary, expected to grab at least 30% of the EPCC market share,' said Kenanga. Kenanga's sector top picks are niche players like PEKAT and SET that stand out as profitability-focused RE players, offering cheap proxies to the RE play. With contract awards expected to accelerate in the coming months and management maintaining a conservative outlook, upside surprises remain on the table. PEKAT stands out for its focus on high-margin residential and commercial rooftop solar projects but the game changer here is its newly acquired switchgear business. As the top four MV switchgear supplier to TNB, EPE is set to ride on TNB's massive RP4 capital expenditure with further upside from leveraging on PEKAT's network to capture a larger slice of private sector deals like DCs. SET, the only certified player in explosion proof solar PV systems in ASEAN, is strategically positioned to ride the region's growing focus on RE within the O&G up-cycle. Regional giants (PTTEP, PTSC, Pertamina) are ramping up aggressively driven by favourable crude oil prices with net-zero commitment by 2050 guaranteeing continued green investments. —June 17, 2025 Main image: AFP Photo
