Maybank IB Research expects Cypark Resources to book a recovery in earnings
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NewsTranscript
00:00 Our stock in focus today is Saipark Resources.
00:05 Maybank Investments Bank Research, which recently met with the company's management,
00:09 said it's upgrading the stock to tactical buy from hold,
00:13 though it's keeping its target price unchanged at RM1.05.
00:16 The counter last traded at RM0.895.
00:20 So, key takeaways.
00:21 Firstly, Saipark's ongoing construction of three large-scale solar, or LSS, projects
00:26 in Trengganu and Kelantan are targeted for completion by December 2023.
00:32 Then there's the Waste-to-Energy, or WTE, plant at Ladang Tanah Merah, Negeri Sembilan,
00:37 which is expected to achieve optimal operation this coming December.
00:41 By then, the WTE segment is expected to generate circa RM80 million in revenue,
00:47 which covers tipping fee, recycling revenue and green energy sale to TNB.
00:51 According to Maybank, Saipark has been liaising closely with the authorities
00:56 on a revision to tipping fees and is asking for higher fees in an upcoming review.
01:01 It now receives a tipping fee of circa RM33 per metric tonne of municipal solid waste.
01:07 The company is also exploring new renewable energy, or RE, related opportunities with several states,
01:14 with an eye on expansion in engineering, procurement, construction
01:17 and commissioning works or asset ownership.
01:20 It sees further opportunities from the remaining 237 megawatts of the Corporate Green Power Programme,
01:26 or CGPP, which has yet to be awarded, and RE export.
01:31 So what's the consensus?
01:32 According to Bloomberg data, Maybank's buy-in side, there's also a hold-call by Public Invest,
01:38 with a target price of 90 cent.
01:40 That takes the average target price to 97 cent,
01:43 which is some 8 percent higher than Saipark's last close of 89.5 cent.
01:49 (Music)