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Maybank IB expects re stocks earnings to recover in 2022

14/01/2022 11:51 AM

KUALA LUMPUR, Jan 14 -- Maybank Investment Bank (IB) Bhd is expecting an earnings recovery for renewable energy (RE) stocks in 2022, as movement restrictions are eased and work momentum for solar installations accelerates.

In a research note today, Maybank IB said the recently launched Malaysia Renewable Energy Roadmap (MyRER) for 2022-2035 is expected to boost RE from 23 per cent or 8.45 gigawatts of national installed capacity mix in 2020 to 31 per cent in 2025, and 40 per cent in 2035.

“The strategic pillars for the RE growth will continue to leverage the existing untapped resources (solar photovoltaic, bioenergy and hydro).

“New technologies and resources are also expected to support the MyRER post-2025. As such, we remain positive on the sector, with ‘buy’ ratings for Cypark Resources Bhd (Cypark) and Solarvest Holdings Bhd (Solarvest),” it said.

It noted that Solarvest’s strong orderbook, which stood at RM635 million, would continue to support earnings growth.

“Meanwhile, the earnings profile for Cypark is expected to improve as its RE portfolio is set to grow from financial year 2022 (FY22) onwards, whereby it expects to manage and operate a combined solar capacity of 230 megawatts (MW), from 40MW currently, as well as kick-start its first 25MW waste-to-energy plant," it said.

On the large-scale solar 5 (LSS5) tender, the investment bank expects the tender to be opened this year, with tariff reference expected to be higher than LSS4 due to major procurement and supply chain disruptions that led to an increase in solar-related material prices.

“We believe the disruptions will also pose a temporary risk to project execution and potential delays in existing solar project installations into the second half of 2022," it said.


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