This article first appeared in The Edge Malaysia Weekly on March 30, 2026 - April 5, 2026

THE recent rise in solar panel prices, triggered by China’s removal of export tax rebates, has drawn renewed scrutiny over cost pressures faced by engineering, procurement, construction and commissioning (EPCC) contractors, most of which have little control over the price of their largest cost component.

Solar modules typically account for the bulk of project construction costs, effectively rendering contractors largely price takers in the global supply chain.

Nevertheless, Samaiden Group Bhd ­(KL:SAMAIDEN) managing director Datuk Chow Pui Hee says the EPCC contractor has already procured all the solar panels required for its current order book of RM600 million, providing earnings visibility for about two years.

She tells The Edge in an interview that the company is banking on its renewable energy (RE) assets to provide more stable earnings once they become operational in about 20 months.

Of the orders in hand, 75% are from large-scale solar (LSS) projects, 20% from commercial and industrial (C&I) clients, and the remainder from other segments.

So far, a third of the panels have been shipped, with the rest scheduled for delivery by April, hedging it against future price increases. Storage costs are negligible, as panels are shipped directly to project sites.

“Although short-term financing costs may rise, overall costs remain well within budget,” Chow says.

While EPCC remains Samaiden’s primary revenue driver, the company is gradually building a portfolio of RE assets to generate recurring income. Its effective ownership portfolio stands at roughly 202mw, with the majority expected to be operational by 2028.

Two utility-scale solar farms form the backbone of this strategy: a wholly owned 99.9mw project in Kelantan and a co-developed 99.9mw project in Johor, in which Samaiden holds a 70% stake. Together, they have nearly 170mw in effective capacity.

Both projects are under 21-year power purchase agreements with Tenaga Nasional Bhd (KL:TENAGA) and are expected to be completed by October 2027, with full financial contribution likely to be reflected in the financial year ending June 30, 2028 (FY2028).

The remainder of Samaiden’s RE assets are smaller projects under the Corporate Green Power Programme (CGPP) as well as ventures in biogas and biomass. Chow expects renewable assets to contribute between 10% and 15% of its revenue by FY2028.

Asked about the potential revenue from an LSS farm, Chow explains that a 100mw solar farm can generate more than RM30 million in annual revenue and has a net profit margin of 20%. Cost items include depreciation, financing interest, land rental and equipment maintenance.

On top of recurring earnings, the group’s net profit margin — which ranged between 5.7% and 7.9% over the past four years — is expected to improve as the solar farms become operational.

With regard to its recent RM45.5 million acquisition of a 185.57ha parcel in Teluk Intan, Perak, Chow says part of the land will be leased for solar farm development. The developer has already awarded RM290 million worth of EPCC jobs to Samaiden and the remaining land will be reserved for future projects.

The issue of rising solar module prices became more pronounced after China’s policy shift earlier this year. On Jan 9, the world’s second-largest economy announced the removal of a 9% value-added tax (VAT) export rebate for solar photovoltaic products, effective from April 1. The rebate has long been viewed as an indirect subsidy to support Chinese manufacturers.

Solar module prices, which fell to historic lows of seven to nine US cents per watt between 2024 and early 2025, have climbed to roughly 13 US cents per watt currently.

The development has unsettled solar EPCC-linked stocks, which had benefited from strong order books and favourable RE policies. Shares in these companies have fallen between 20% and 30% since the start of the year, with Samaiden declining 30% during this period.

In anticipation of the shift, Chow says, the company had included in its contracts clauses specifying that any price increases tied to the VAT rebate removal be borne by its clients. This move underscores the company’s emphasis on risk management and transparency, she adds.

While Samaiden aims to grow RE asset contribution to 50% over the long term, Chow emphasises that its core business remains EPCC services, allowing it to avoid aggressive competition with developers for project ownership.

“In Malaysia, developer projects are not our main priority. If we compete directly using our EPCC cost structure, we would likely win, but it would damage our relationships with customers,” she says.

Instead, Samaiden typically participates in projects as both contractor and minority investor, as it can then benefit from asset ownership while maintaining a strong partnership with developers. This approach ensures long-term industry relationships and repeat mandates.

Another way Samaiden sets itself apart is through its engineering capability and involvement in project financing. Developers often rely on EPCC contractors not only for construction but also for technical support when securing loans. Banks typically require detailed engineering assessments — including system design, energy-yield forecasts and construction schedules — before approving financing. According to Chow, many developers lack in-house teams capable of providing these details.

As a result, Samaiden frequently prepares documentation and participates in discussions with lenders. “When developers apply for financing, the banks ask many technical questions. We help explain the engineering aspects of the project,” she says, noting that this role strengthens the company’s position as a strategic partner rather than as a mere contractor.

At the same time, the company emphasises value engineering to optimise project economics. Design decisions — from panel layout and land utilisation to equipment selection — can significantly affect costs and energy output.

“With tariffs getting lower, you cannot rely on higher prices to protect margins. You need to optimise the engineering,” says Chow.

While some RE companies partner with private equity investors to fund their expansion, Samaiden prefers working with industry partners. Solar projects typically generate single-digit returns, which may not meet the expectations of private equity funds seeking double-digit yields.

“When private equity investors ask for double-digit returns, it becomes very difficult,” Chow says, explaining that the company opts instead to collaborate with developers, landowners and companies that can provide synergistic benefits to the projects.

As at end-2025, Samaiden was in a net cash position of about RM102 million, with access to a RM1.5 billion sukuk programme, of which only RM113 million has been utilised.

Chow says the company’s balance sheet is strong and the available funding enables it to invest in renewable assets while continuing to undertake EPCC projects.

Over the next few years, Samaiden, which has a workforce of around 150, will focus on strengthening internal systems to manage multiple projects simultaneously, instead of significantly expanding its headcount.

Since the introduction of the feed-in tariff programme in 2012, Malaysia’s solar industry has experienced several boom-and-bust cycles. The policy initially attracted hundreds of service providers, but many smaller players eventually exited the market. Demand surged again after improvements to the net energy metering framework in 2019 and incentives for residential installations.

Chow believes the sector is now entering another consolidation phase, owing to the slowdown in residential demand as well as the weakened rooftop installation market for commercial and industrial customers arising from policy changes that have lengthened investment returns, such as standby capacity charges and battery installations.

Unlike earlier frameworks that imposed quotas and created urgency, the current structure encourages a wait-and-see approach. As a result, smaller installers that expanded aggressively during the boom years are facing declining demand.

Nevertheless, Chow says Samaiden remains shielded, given its pipeline of LSS projects and secured panel supply.

Looking ahead, she expects solar projects in Malaysia to become larger and more complex, particularly if government tenders incorporate battery energy storage systems.

“[Compared to the current size of 100mw,] the next projects could reach 500mw, and with battery integration, their value would easily run into billions,” Chow says.

Such projects will demand stronger balance sheets, experienced contractors and more sophisticated financing structures. “With larger projects, costs are higher. But as long as we have the balance sheet and the right partners, we can continue to participate,” she adds.

On the financial front, Samaiden is set to deliver its fourth straight year of revenue and net profit growth. For the first half ended Dec 31, 2025 (1HFY2026), its net profit nearly doubled to RM15.23 million from a year ago, while revenue climbed 47% to RM191 million from RM129.43 million.

Over the past three years, the company has consistently expanded both its top and bottom lines. Net profit rose from RM10.1 million on revenue of RM171 million in FY2023, to RM16 million on RM227 million in FY2024, and further to RM20.2 million on RM354 million in FY2025.

All six analysts covering Samaiden have “buy” calls, with target prices ranging from Affin Hwang Investment Bank’s RM1.50 to TA Securities’ RM1.96. The average target price is RM1.72, implying an upside potential of 65.4% based on last Wednesday’s closing price of RM1.04 that valued the company at RM523.5 million. 

Kenanga Research, which has Samaiden as its top solar sector pick, expects the company’s market share to rise from 5% to 12%, supported by near-term order book replenishment from LSS5+, for which about half of capacity remains unallocated.

“Given its established track record in ground-mounted solar EPCC projects, we believe Samaiden remains well positioned to scale its LSS5+ market share towards 12%, supported by a strong balance sheet and about RM1.39 billion in unutilised sukuk facilities, providing tender headroom of more than 300mw,” the research house said in a Feb 26 note.

According to AskEdge data, Samaiden is trading at a price-earnings ratio of 17.6 times, lower than peers such as Solarvest Holdings Bhd (KL:SLVEST) at 25.6 times, Pekat Group Bhd (KL:PEKAT) at 21.7 times, Northern Solar Holdings Bhd (KL:NORTHERN) at 19.7 times and Sunview Group Bhd (KL:SUNVIEW) at 43.7 times.

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