Solarvest, Samaiden tipped for first Cress project wins within three months

KUALA LUMPUR: Analysts from Hong Leong Investment Bank (HLIB) predict Singapore-headquartered global data centre operator DayOne's Cress project could yield an internal rate of return (IRR) of around 12%, compared to 6-8% for previous Large Scale Solar (LSS) projects. This indicates Cress projects might generally generate IRRs of 9-11%, depending on power purchase agreement tenure, contracted tariff, land, and financing costs.

HLIB raised Solarvest's earnings forecasts for FY27, FY28, and FY29 by 35.1%, 33.2%, and 33% respectively, due to higher order book and margin assumptions. The bank maintains a Buy rating on Solarvest and increased its target price to RM4.85 from RM3.59. Solarvest's collaboration with Brookfield provides access to larger projects and land in key data centre clusters in Johor, strengthening its ability to participate in Cress projects.

Samaiden's FY27 and FY28 earnings forecasts were raised by 42% and 48% respectively, primarily on higher order book assumptions. The firm maintains a Buy rating on Samaiden with a higher target price of RM3.13. HLIB sees the Cress Acceleration Package as speeding up project development and offers developers better returns than LSS projects, which often lead to lower tariffs and project returns due to competitive bidding.