Kinergy Advancement Bhd (KAB) posted a strong 27.1% YoY core net profit growth in 1QFY25, driven by lower administrative costs, recurring income from power purchase agreement (PPA) assets, and higher revenue from sustainable energy solutions (SES) and M&E EPCC projects. With recent contract wins, its order book doubled quarter-on-quarter to RM1.4 billion, providing revenue visibility for at least five years.
KAB continues expanding its renewable energy (RE) portfolio, including a strategic partnership with Perbadanan Kemajuan Negeri Perak (PKNPk) for 29 solar and hydro projects totalling 1.8GW. Its recurring income from 12 RE assets currently yields RM13 million annually, with PPA coverage extending up to eight years.
Notably, KAB’s entry into the Independent Power Producer (IPP) segment through a 38% effective stake in the TTPC power plant could contribute up to RM33 million to earnings upon recommissioning. The company is also eyeing plant expansion to 1,200MWac to meet Malaysia’s rising power demand.
Apex Research assigns a fair value of RM0.45 based on 18x FY26F EPS of 2.5 sen and a three-star ESG rating. KAB’s stable recurring income, proven SES track record, and IPP expansion position it well for long-term growth, despite risks tied to government support and rising costs.
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