KUALA LUMPUR (Feb 6): Northern Solar Holdings Bhd (KL:NORTHERN), which made its debut on the ACE Market on Thursday, is looking to expand its footprint in Southeast Asia, according to its managing director Lew Shoong Kai.

"In Southeast Asia, there are quite a few potential countries, but we do not have a solid target at the moment. Upon listing, we will evaluate the opportunities and bring them to the management discussion," he said at a press conference following the company’s listing.

Northern Solar made a strong debut on the ACE Market on Thursday, gaining 43% from its initial public offering (IPO) price of 63 sen. 

As of 10.35am, the counter had risen by 26.19% or 16.5 sen to 79.5 sen, giving it a market capitalisation of RM314.5 million.

"In the coming years, we expect to secure more solar projects, and we are targeting a 20% increase in (solar rooftop segment) revenue [from FY2025 onwards]. 

"We will remain focused on rooftop solar, which can bring us the highest profit margins," Lew said.

As at Nov 19, 2024, the company's tenderbook stood at RM1.8 billion. 

Its current tenderbook consists of 387 tenders for the engineering, procurement, construction, and commissioning (EPCC) of solar photovoltaic (PV) systems projects. 

These tendered projects are still pending decisions from clients, and if awarded, will further increase its orderbook from RM83.2 million. 

The company is primarily engaged in the EPCC of solar PV systems, renewable-energy (RE) generation, and the operations and maintenance of solar PV equipment and systems. 

These services cater to commercial, industrial, and residential buildings across Malaysia.

When asked about profit margin normalisation in the coming years as China tackles solar module overcapacity, Lew stated: "Overcapacity is reducing material costs, benefitting us, and we anticipate slight growth in our profit margins".

The company’s gross profit margin increased to 27.7% in the financial year ended March 31, 2024 (FY2024), from 25.3% in FY2023, driven primarily by the completion of 187 new and 53 ongoing EPCC solar PV system projects from the previous year.

Revenue surged 74.55% to RM77.97 million from RM44.67 million, with 98.8% of the revenue coming from the EPCC of solar PV systems and the remaining 1.2% from RE generation.

According to the company’s prospectus, its primary suppliers and subcontractors for solar PV panels include China-based JA Solar International Ltd and Longi Solar Technology Co Ltd. Additionally, Syarikat Logam Unitrade Industries Bhd, a wholly owned subsidiary (KL:UNITRAD), is also involved in supplying solar PV panels to the company. 

Northern Solar has raised RM42.4 million from its public issue of 67.3 million new shares at 63 sen apiece. 

Of the total proceeds, RM29.2 million is allocated for working capital purposes to expand its solar PV systems business. Some RM3.2 million will be used to establish a new corporate office with an engineering command centre in Petaling Jaya, as well as to fund the establishment of expanded offices in Johor and Penang, to strengthen its market presence in the southern and northern regions of Peninsular Malaysia.

About RM5.5 million is allocated for repayment of bank borrowings, and RM4.6 million for estimated listing expenses. 

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