Stronger earnings visibility from new win for Northern Solar

By the Editorial Team · Friday, October 9, 2026

Northern Solar Holdings Bhd has secured a RM34 million contract for a 9.5MW solar project under the LSS5 scheme, boosting its order book to a record RM223 million and enhancing earnings visibility for 2027 and 2028. This expansion supports a projected 50% net profit growth in FY27 and positions the company to benefit from rising demand in solar installations and upcoming energy storage and renewable energy projects.

Northern Solar Holdings Bhd has secured an additional RM34 million contract for a utility-scale engineering, procurement, construction, and commissioning (EPCC) project, enhancing its earnings visibility for the financial years 2027 and 2028. The contract, awarded under the Large-Scale Solar Five (LSS5) scheme, constitutes the company’s second major utility-scale project win within the past year.

The new project involves a 9.5-megawatt alternating current solar installation, which is scheduled for commissioning by May 1, 2027. Industry analysts expect the majority of revenue contributions to be recognised in the 2027 financial year, with anticipated net profit margins ranging between 7 and 9 percent.

Including this contract, Northern Solar’s order book has reached a record RM223 million, largely supported by its two LSS5 EPCC contracts. The group’s portfolio also benefits from rooftop solar projects catering to commercial and industrial (C&I) clients, as well as residential segments. Currently, approximately 85 percent of the company’s revenue stems from the C&I sector.

Market research projects a substantial growth trajectory for Northern Solar, with net profit for FY27 expected to rise by 50 percent year-on-year. Revenue for the year is forecasted to double, buoyed by the RM34 million and RM120 million LSS5 project executions, a recovery in residential rooftop solar installations stimulated by the RM3,000 SuRIA Home rebate, and increasing demand from businesses aiming to contain rising electricity costs.

Looking ahead, the company plans to maintain steady topline growth, targeting annual revenues of RM100 million from C&I solar installations and RM60 million to RM80 million yearly from residential projects. Additionally, Northern Solar aims for its battery energy storage system ventures—both standalone and bundled—to represent 5 to 10 percent of annual revenue.

Analysts also highlight the potential impact of a 170MW Corporate Renewable Energy Supply Scheme (Cress) project, which could generate a recurring income stream of RM20 million annually assuming full ownership. With an 80 percent equity stake, the project could boost the company’s net profit by RM18 million, accounting for roughly 34 percent of the FY29 net profit forecast. The equity value of the Cress project is estimated at RM320 million, which may drive Northern Solar’s fair value from RM1.50 to RM2.20 once the project materialises.

Reflecting these developments, research firms have maintained a “buy” recommendation for Northern Solar, setting an increased price-to-earnings (PE) ratio target price of RM1.40 based on 15 times forecast earnings per share for FY28. This valuation is more conservative relative to the sector average PE of 19 times and accounts for factors including market capitalisation and liquidity constraints.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.