KUALA LUMPUR (May 13): TA Securities has valued ACE Market-bound engineering solutions provider Kawan Renergy Bhd at 12 times calendar year 2025 (CY2025) earnings per share (EPS), arriving at a fair value of 55 sen.
In a note on Monday, the research house, which does not have a rating on the stock, said that at an initial public offering price of 30 sen, Kawan Renergy is priced at a trailing price-earnings ratio (PER) of 11.2 times financial year 2023 (FY2023) core EPS.
TA Securities said that moving forward, it anticipates the group to post core earnings growth of 22.4% to RM18 million for FY2024, 33.2% to RM24 million for FY2025, and 28.9% to RM31 million for FY2026.
It said this growth is largely based on the following key assumptions:
- A total order book of RM72.9 million to be recognised in the next two financial years.
- A project replenishment target of circa RM100 million per year.
- Margin improvement due to better margin projects contributed by the renewable energy and co-generation segment.
TA Securities said that notably, there is currently no listed company on Bursa Malaysia that is directly comparable to Kawan Renergy.
“However, we identify Wasco Bhd (KL:WASCO), which specialises in special tanks, pressure vessels, piping and processing equipment engineering service provider, and BM Greentech Bhd (KL:BMGREEN), which focuses on boiler manufacturing, for peer comparison," the research house said.