CIMB Research says Cypark may double renewable energy capacity, ups target price

by **Cals** Tue 01 Apr 2014, 01:24

Business & Markets 2014

Written by Jeffrey Tan of theedgemalaysia.com

Monday, 31 March 2014 10:25

KUALA LUMPUR (Mar 31): CIMB IB Research has maintained its Add rating on Cypark Resources Bhd at RM2.79 with a higher target price of RM3.09 (from RM2.68) and said Cypark may double its end-FY14 target for renewable energy (RE) capacity of 50MW, following in the footsteps of 1MDB that is in line to build the country's largest solar power plant at 50MW.

In a note today, the research house said 1MDB’s move was positive for Cypark, as this meant that it too could propose a project similar to 1MDB's.

“While there is still no concrete news with regards to Cypark bidding for such a project, we believe the chances are high,” opined CIMB IB research analyst Faisal Syed Ahmad.

Faisal, however, noted 1MDB’s potential solar power plant contract was outside of the feed-in-tariff (FiT) programme which only applies to projects up to 10MW.

“We understand that Cypark is aiming for at least another 10MW of new RE quota from the Sustainable Energy Development Authority Malaysia (SEDA),” he said.

He added SEDA’s new RE quota under the FiT programme is postponed to April, according to news reports.

“We believe the announcement of more RE projects to be undertaken by Cypark would likely catalyse the stock,” he remarked.

In addition, he said Cypark’s 1Q14 core net profit of RM7.7 million accounted for 18% of our full-year estimate and 20% of the consensus number.