KUALA LUMPUR: Apex Securities Sdn Bhd has assigned a fair value of RM0.45 per share for sustainable energy and engineering solutions provider Kinergy Advancement Bhd (KAB), implying an upside potential of about 36.4% from its current market price of RM0.33.
This makes the company an attractive consideration for investors looking at renewable energy opportunities.
Apex Securities’ report highlights KAB’s substantial order book, valued at RM361 million, providing earnings visibility through 2026.
Approximately 71% of this order book stems from the sustainable energy solutions (SES) segment, reflecting the success of KAB’s strategic shift toward renewable energy.
The company’s diversified SES portfolio comprises solar projects, hydroelectric power, biogas, and waste-to-energy initiatives, all contributing to stable and recurring revenue.
Additionally, Apex points out KAB’s competitive advantage derived from its integrated service offerings, which allow it to secure projects through direct negotiations.
This model translates into improved profitability and consistent revenue performance.
Another significant driver of future earnings is KAB’s recent partnership with Perbadanan Kemajuan Negeri Perak (PKNPk), focusing on developing 29 renewable energy projects in Perak.
“We expect these initiatives to produce a combined capacity exceeding 1,800 MW, featuring large-scale floating and ground-mounted solar installations as well as small-scale hydropower projects,” said Apex Securities in a note.
This strategic collaboration positions KAB favourably to benefit from the rising demand for renewable energy solutions from sectors such as data centres and manufacturing facilities.
Additionally, KAB’s acquisition of a 47.5% share in Jati Cakerawala gives it a 38% indirect ownership in Teknologi Tenaga Perlis Consortium (TTPC), boosting KAB’s ability to play a major role in the power generation industry.
The acquisition involves a site that previously hosted a 650MW combined-cycle gas turbine power plant, offering substantial repowering potential.
Apex Securities said this asset presents an attractive opportunity for KAB to strengthen its footprint within Malaysia’s energy infrastructure.
Financially, KAB reported a record revenue of RM244.8 million for FY24, representing a growth of 22.8% from the previous year, primarily driven by expansion within the SES segment.
Apex Securities anticipates a compound annual growth rate (CAGR) of 21.3% in core net profit over the next three years, supported by a diversified portfolio and a robust project pipeline.
However, Apex Securities cautions on potential risks such as securing new projects, escalating construction costs, and challenges in sourcing skilled labour.
Nevertheless, the research firm remains confident in KAB’s proven track record in managing these risks through disciplined financial oversight and strong execution capabilities.
Overall, Apex Securities’ evaluation presents KAB as a solid investment opportunity, citing its sustainable growth path, strategic positioning in Malaysia’s renewable energy sector, and strong financial foundations.
“As Malaysia progresses towards its sustainability targets, KAB appears well-equipped to capture the emerging opportunities in this rapidly growing market,” it said.
Kinergy Advancement Bhd is set to benefit from the rising demand for renewable energy solutions from sectors such as data centres and manufacturing facilities.
