KUALA LUMPUR: Cypark Resources Bhd's 20 megawatts (MW) waste-to-energy (WTE) plant at Ladang Tanah Merah is expected to achieve a commercial operation date (COD) in the financial year 2022 (FY22) following the reopening of the economy.

CGS-CIMB Research said the COD was delayed previously as foreign specialists could not enter Malaysia to conduct testing due to lockdowns and travelling restrictions.

Further, Cypark is participating in two WTE tenders, one in Johor (Bukit Payong) and one in Melaka (Sungai Udang), collaborating with Johor and Melaka state-owned companies, respectively.

Its 100MW large-scale solar (LSS) 3 project in Terengganu has started construction and should achieve COD by FY22.

"We expect the COD for its LSS 2 plant to be in FY22.

"The company targets to secure some engineering, procurement, construction and commissioning (EPPC) contracts from the LSS 4 winners," it said in a note today.

Meanwhile, CGS-CIMB Research said Cypark's first quarter (Q1) FY22 net profit was in line, at 15 per cent of the firm's and 13 per cent of Bloomberg consensus full-year estimates, as Q1 is seasonally its weakest quarter, and work progress could catch up in the following quarters.

It said Cypark's Q1 FY22 core net profit declined marginally by one per cent year-on-year (YoY) mainly due to higher administrative cost (+18 per cent YoY) and higher distribution to holders of perpetual sukuk, which offset the better performance at the renewable energy division.

It said Cypark's Q1 FY22 core earnings dropped 43 per cent quarter-on-quarter (QoQ) versus Q4 FY21 due to lower site activities this quarter and better profit margin from the specialist projects in Q4 FY21.

CGS-CIMB Research has reiterated its 'Hold' call on Cypark, with a lower target price of 85 sen from the previous 96 sen, given the potential further delays in its plants' COD and potential cash call or asset disposal to fund future projects.