Sunview Group Berhad: A Case of Market Mispricing in Malaysia's Renewable Energy Sector

Sunview Group Berhad (KLSE:SUNVIEW) has experienced a notable share price decline, trading at RM 0.38 as of October 15, 2025, despite maintaining a robust order book and policy-driven growth tailwinds in Malaysia's renewable energy sector. This divergence between fundamentals and market valuation raises questions about potential mispricing, driven by sector-specific risks and investor sentiment shifts.

Fundamentals: A Strong Foundation Amid Earnings Pressure

Sunview's financials reveal a mixed picture. While full-year 2025 revenue fell 51% to RM 226.83 million and net income dropped 34% to RM 6.35 million, the company's profit margin improved to 2.8% from 2.1% in FY 2024, reflecting cost disciplineSunview Faces Setbacks, But Analysts See Bright Spots Ahead^[2]. A critical strength lies in its unbilled order book of RM 235.5 million, providing earnings visibility through FY 2026SUNVIEW GROUP BERHAD Reports Q4 FY2025 Financial Results^[4]. This backlog, coupled with a trailing price-to-earnings (PE) ratio of 32.35 and a forward PE of 28.51, suggests the market may be underestimating future cash flowsSunview Group Berhad (KLSE:SUNVIEW) Statistics & Valuation^[1].

Analysts remain cautiously optimistic. Despite a 31.4% reduction in FY 2025 earnings estimatesSunview Faces Setbacks, But Analysts See Bright Spots Ahead^[2], Sunview's involvement in large-scale solar projects-such as the RM 51.9 million Corporate Green Power Programme (CGPP) contract-positions it to benefit from Malaysia's National Energy Transition Roadmap and RM 300 million in green energy budget allocationsSunview Group Berhad - Built to Shine^[3].

Market Mispricing: Sector Challenges and Investor Sentiment

The renewable energy sector in Malaysia faces headwinds that have dampened investor enthusiasm. A key challenge is the energy trilemma, where balancing economic sustainability, environmental goals, and energy security has slowed progressSunview Group Berhad (KLSE:SUNVIEW) Statistics & Valuation^[1]. For instance, Sunview's Q2 2025 revenue plummeted 75.3% year-on-year to RM 50.4 million due to delayed revenue recognition from prior-period solar module deliveriesSunview Faces Setbacks, But Analysts See Bright Spots Ahead^[2]. This volatility, combined with a gross profit margin contraction to 13.9%, has raised concerns about operational consistencySunview Faces Setbacks, But Analysts See Bright Spots Ahead^[2].

Externally, global supply chain risks exacerbate sector-wide pressures. U.S. tariffs on solar panel imports from Southeast Asia could increase cost pressures, though oversupply in solar PV modules has temporarily cushioned players like SunviewSunview Faces Setbacks, But Analysts See Bright Spots Ahead^[2]. Additionally, low uptake of non-solar renewables-such as wind and biogas-under Malaysia's Low Carbon Energy Generation Programme highlights sector imbalancesSunview Faces Setbacks, But Analysts See Bright Spots Ahead^[2].

Investor sentiment, however, is not entirely bearish. Globally, renewable energy investments hit a record $386 billion in H1 2025, driven by policy incentives like the U.S. Inflation Reduction Act and falling technology costsRenewable Energy Stocks Surge: A New Dawn for Clean Power in Financial Markets^[5]. Yet, local investors remain cautious, with Sunview's share price underperforming broader market indices despite its low beta of 0.54Sunview Group Berhad (KLSE:SUNVIEW) Statistics & Valuation^[1].

Path to Correction: Policy Tailwinds and Analyst Optimism

Sunview's long-term prospects hinge on its ability to capitalize on Malaysia's renewable energy expansion. The company's RM 235.5 million order book and participation in the 800MW CGPP programSUNVIEW GROUP BERHAD Reports Q4 FY2025 Financial Results^[4] suggest a path to revenue stabilization. Analysts have revised their target price to RM 0.46 from RM 0.54SUNVIEW GROUP BERHAD Reports Q4 FY2025 Financial Results^[4], reflecting tempered optimism but still implying a 31.6% upside from current levels.

Moreover, Malaysia's recent agreement to export 50MW of renewable energy to Singapore, though still in early stages, could unlock new revenue streamsSunview Faces Setbacks, But Analysts See Bright Spots Ahead^[2]. If Sunview secures a share of these projects, its earnings visibility and profit margins could improve significantly.

Conclusion: A Mispriced Opportunity?

Sunview Group Berhad's share price decline appears to reflect sector-wide uncertainties rather than a fundamental deterioration in its business. While near-term earnings pressures persist, the company's strong order book, policy tailwinds, and low volatility (beta of 0.54) suggest a potential correction is warranted. Investors with a medium-term horizon may find value in Sunview's undervalued equity, provided the company executes on its pipeline and navigates supply chain risks effectively.