KUALA LUMPUR (Dec 18): ACE Market-bound Northern Solar Holdings Bhd plans to expand its coverage across Malaysia, targeting key regions especially in Johor and Penang, among others, on top of its existing market in the Klang Valley and Selangor areas, according to managing director Lew Shoong Kai.
Founded in 2019, Lew noted that the company has already completed over 1,000 solar energy installations nationwide, encompassing C&I buildings and residential properties, with a total installed capacity of 71.9 megawatts (MW).
"This IPO is the next natural step for Northern Solar as it comes in light of the trends Malaysia and indeed the region is seeing in term of awareness in preserving our environment and addressing climate change challenges," Lew said during the launch of the company’s IPO prospectus, seeking to raise up to RM64.8 million.
WATCH: Northern Solar eyes solar energy expansion post-IPO
Northern Solar currently owns and operates 17 solar PV systems, alongside four additional systems held under its 20%-owned associate, Engtex Energy Sdn Bhd, where pipe and valve manufacturer Engtex Group Bhd (KL:ENGTEX) owns the remaining 80% stake.
Northern Solar also has 51% in another solar PV system developer Norwatt Power Sdn Bhd, in which 25% is held by Tengku Fahad Mua'adzam Shah ibni Almarhum Sultan Haji Ahmad Shah through Hawthorne Capital Sdn Bhd.
Lagenda Properties (KL:LAGENDA) holds 15% equity interest in Northern Solar.
As part of its growth strategy, Northern Solar plans to allocate RM32.3 million from its IPO proceeds to establish a new corporate headquarters equipped with an engineering command centre. The facility will streamline operations and enhance the company’s ability to monitor energy performance for clients.
“We also intend to pursue a model of develop-own-operate portfolio of PV assets that sell electricity to Net Energy Metering (NEM) and Self-Consumption (Selco) customers to generate a stable inflow of revenue," Lew added.
For the financial year ended March 31, 2024 (FY2024), Northern Solar reported a profit after tax (PAT) of RM10.09 million, representing a 65% increase from RM6.12 million in FY2023. Revenue surged 74% to RM77.97 million from RM44.67 million during the same period, driven by contributions from both new and ongoing projects.
Northern Solar made a PAT of RM3.11 million on a revenue of RM22.23 million in FY2022.
As of Nov 19, Northern Solar has an unbilled order book of more than RM70 million with submitted tender projects of more than RM1 billion tender book value. "Our internal analysis shows that we have a success rate of about 15%" Lew noted.
Northern Solar’s IPO is priced at 63 sen per share, translating to a market capitalisation of RM249.23 million based on its enlarged share capital of 395.6 million shares. The IPO values the company at a price-to-earnings (P/E) ratio of 24 times its FY2024 earnings.
The IPO is available for subscription starting Dec 20, with the application closing on Jan 20.
M&A Securities serves as the adviser, sponsor, underwriter, and placement agent for the listing.