[RAM] RAM Ratings affirms Solarvest's AA3/Stable Sukuk rating
RAM Ratings has affirmed the AA3/Stable and P1 ratings of the unsecured and unguaranteed tranches under Solarvest Holdings Berhad’s (Solarvest or the Group) RM1 bil Islamic Medium-Term Notes/Islamic Commercial Papers Programme (2023/2053).
The affirmation reflects the Group’s established market position and track record in the solar engineering, procurement, construction and commissioning (EPCC) segment, supported by its strong execution capabilities and strengthening business profile. Continued sizeable order book replenishments have reinforced its position as a leading solar player in Malaysia, with a development portfolio of close to 4.0GWp as at end-June 2026. Its unbilled orderbook nearly doubled to RM2.4 bil as at end-June 2026 compared to a year earlier, providing revenue visibility through FY Mar 2028. Beyond secured contracts, its tender pipeline of 12.6GWp across Malaysia and regional markets offers further orderbook replenishment opportunities.
The Group entered a partnership with Brookfield CTF Asia Holdings Pte Ltd, a unit of Brookfield Asset Management, to develop, construct and operate at least 1.5GW of utility-scale solar and battery energy storage projects over the next three to five years. The partnership is expected to support Solarvest’s EPCC and asset ownership expansion with limited balance sheet strain through the use of non-recourse project financing (NRPF) at the joint venture level. Solarvest will contribute its development and execution expertise while Brookfield will provide funding support, access to corporate offtakers and operational capabilities. The arrangement could generate investment returns for Solarvest as projects are completed.
Solarvest delivered another record performance in FY Mar 2026, with revenue surging 41% y-o-y to RM758.9 million and pre-tax profit expanding 58% y-o-y to RM117.3 million. Strong earnings growth and proceeds from private placements as well as exercised warrants strengthened its equity base, keeping leverage manageable despite higher debt of RM320.8 million as at end-June 2026. Excluding NRPF, adjusted gearing improved to 0.37 times as at end-June 2026 and is projected to peak at a manageable 0.49 times by end-Mar 2027 under RAM’s more conservative growth and profitability assumptions.
Adjusted funds from operations debt coverage also remained strong at 0.32 times in FY Mar 2026 and is expected to average 0.25 times over FY Mar 2027-FY Mar 2029. Free cash flow is nonetheless projected to remain negative as the Group continues to invest for growth. RAM’s projections deferred funding requirement for upcoming projects relative to management’s plans as a conservative approach. Still, funding support from the Brookfield partnership, together with ample liquidity and demonstrated capital market access, should provide sufficient financial flexibility to fund these investments, subject to the Group maintaining its disciplined expansion and funding growth strategy.
Solarvest however, remains exposed to competitive bidding pressures, order book replenishment and input costs inherent to the domestic solar EPCC industry. While its execution track record has been satisfactory to date, the increasing scale and project complexity will increase demands on management resources, project execution and working capital, heightening execution risk.
Analytical contacts
Lee Jo Yee
(603) 2708 8261
joyee@ram.com.my
Chong Van Nee, CFA
(603) 2708 8210
vannee@ram.com.my
Media contact
Sakinah Arifin
(603) 2708 8212
sakinah@ram.com.my