( Kuala Lumpur, 5th June 2020) The Energy Commission (EC) will conduct the fourth round of large-scale solar power generation project (LSS4) bidding activities, with a total bidding power of 1 GW (GW). This is by far the largest LSS bidding event. Public investment bank analysts are optimistic about this matter, believing that it will bring business opportunities to many solar energy companies, and naming CYPARK resources (CYPARK, 5184, motherboard industrial stocks) is expected to become a big winner.
The fourth round of LSS is open to local companies or listed companies with at least 75% equity held by local companies to bid. According to analysts, each company has up to three bid opportunities. The relevant solar power plant must be commissioned by the end of 2023 for a period of 21 years with a total value of RM 4 billion.
Revealed at the end of the year
The time limit for bidding has also been shortened from the original 6 months to 3 months. The tentative deadline for bidding is August 29, and the selected bidders will be announced at the end of the year.
In addition, this bidding event did not announce any reference price. However, the bid price of the third round of LSS is between 17 sen and 58 sen per kilowatt hour (kWh), so analysts believe that the bid price of each enterprise this time will not be far from the price of the third round.
At present, renewable energy accounts for 8% of my country's total power generation energy. Renewable energy in the Malaysian Peninsula covers solid waste, small hydropower plants, biomass, biogas, geothermal and solar energy. The government has also set a target to increase the generation of renewable energy to 20% by 2025.
Analysts believe that the higher power bidding level for LSS round 4 will enable CYPARK resources. This is because the company has the expertise and knowledge of solar power generation, and is also a developer and operator of solar parks with deep experience.
In addition, with the successful operation of its DonSahong hydroelectric power plant in Vietnam, Mega One (MFCB, 3069, Main Board Utilities) also intends to enter the renewable energy business in Malaysia. Other potential beneficiaries include SOLARVEST Holdings (SLVEST, 0215, GEM), Maraca (MALAKOF, 5264, Main Board Public Shares), Yang Zhongli Power (YTLPOWR, 6742, Main Board Public Shares) and National Energy (TENAGA, 5347, Main Board Public Stocks).
In any case, the share price of CYPARK Resources did not respond very much to the news that the fourth round of LSS began bidding. It fell slightly by 0.5 sen or 0.5% on Friday to 95.5 sen, with a volume of 3.73 million shares.
**Info & Image are taken online
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