KUALA LUMPUR (Sept 25): Northern Solar Holdings Bhd (KL:NORTHERN) extended its rally to a new record on Friday after an analyst flagged earnings jump ahead for the renewable energy company.

Net profit could surge 74% in the 12 months ending March 31, 2027 thanks to a RM119 million award under the fifth round of large scale solar (LSS5) programme as well as engineering, procurement, construction and commissioning jobs, Apex Securities said in an unrated report.

“Northern Solar is moving into a stronger earnings cycle” with LSS5 providing near-term visibility while the company begins a pivot into asset ownership, the research house said.

Shares of Northern Solar climbed as much as 18 sen or 15% to RM1.36 before pausing at RM1.29 in Friday trading. The stock has racked up nearly 90% gain in just six consecutive days of rally after staying mostly rangebound since the year began.

Northern Solar only has one regular analyst coverage with UOB Kay Hian rating the stock a ‘buy’ with a target price of RM1.00.

Apex Securities, meanwhile, said the fair value for Northern Solar should be RM1.44.

At that price, the stock is worth 15 times its forward earnings, just one-third of the average valuations of larger peers Solarvest Holdings Bhd (KL:SLVEST), Samaiden Group Bhd (KL:SAMAIDEN) and Pekat Group Bhd (KL:PEKAT).

Further, there are “significant upside” from the Corporate Renewable Energy Supply Scheme (CRESS) beyond current forecasts, Apex Securities said, noting that Northern Solar is currently finalising details of a potential 170MW solar-plus-storage project.

Northern Solar is expected to participate as asset owner rather than contractor, which if secured, would represent a major step-up from Northern Solar's existing asset base and accelerate its transition towards long-dated power purchase agreement income, the research house added.