Kerjaya Prospek Acquires Strategic Stake in ES Sunlogy

PETALING JAYA: Kerjaya Prospek Group Bhd has strengthened its foothold in the renewable energy and sustainability sector through its wholly-owned subsidiary, Acumen Marketing Sdn Bhd, which has subscribed to 70 million new shares in ACE Market-listed ES Sunlogy Bhd for RM18.76 million via a private placement. The investment, which was funded entirely through internal funds, represents a 9.09% stake in ES Sunlogy's enlarged share capital and marks the construction group's entry as a strategic shareholder in the engineering and renewable energy firm.

The subscription price of 26.8 sen per share represented a 9.9% discount to ES Sunlogy's five-day volume-weighted average market price of 29.76 sen. With Kerjaya Prospek holding cash and bank balances of RM503.1 million as at March 31, 2026, and total borrowings of RM150.9 million, the investment is well within the group's financial capacity and does not require shareholders' approval.

Strategic Rationale Behind the Investment

Kerjaya Prospek's decision to acquire a stake in ES Sunlogy reflects the construction group's broader strategy of diversifying its revenue streams beyond its core construction and property development activities. The company cited ES Sunlogy's proven expertise in electrical engineering services for electricity supply distribution systems, mechanical engineering services for building services, as well as its growing renewable energy business, as key factors supporting the investment.

Kerjaya Prospek CEO and executive director Tee Eng Tiong said the investment reflects confidence in ES Sunlogy's proven engineering capabilities and long-term growth prospects . "Beyond the investment merits, we see strategic value in partnering with a company whose capabilities complement our core construction business. In addition, ES Sunlogy's portfolio of operating solar assets provides a recurring income stream with strong earnings visibility," Tee added.

Even before the investment, Kerjaya Prospek had engaged ES Sunlogy to supply, install, test and commission electrical and extra-low voltage systems for one of its high-rise projects in Batu Kawan, Penang. This existing business relationship suggests there could be opportunities for future collaboration as Kerjaya Prospek expands its presence in specialised engineering and renewable energy segments.

ES Sunlogy's Market Position and Growth Prospects

Listed on the ACE Market on February 20, 2025, ES Sunlogy has established itself as a notable player in the mechanical and electrical engineering space, with a growing focus on renewable energy. The company specialises in electrical engineering services for electricity supply distribution systems, mechanical engineering services for building services, as well as the generation and sales of renewable energy.

ES Sunlogy has successfully launched two major solar power plants in Malaysia . Its Junjong solar plant, a 20.76 megawatt alternating current Large Scale Solar Photovoltaic 4 project, began commercial operations in July 2023 . This was followed by the Selarong Pertama Energy solar plant, a 29.99 MWac solar photovoltaic plant under the government's Corporate Green Power Programme, which went live in April 2026 .

The company is also actively pursuing growth through the government's Large Scale Solar programme and other renewable energy initiatives . ES Sunlogy has previously partnered with TNB Renewables Sdn Bhd and Solarvest Holdings Bhd subsidiary Blazing Solar Sdn Bhd to develop a 29.99 MW solar plant in Selarang, Kedah. The company holds a 40% stake in the venture, while TNB Renewables and Blazing Solar each hold 30% .

Timing Aligned with LSS6 Programme

The timing of Kerjaya Prospek's investment appears opportune, given the growing market interest in renewable energy and energy storage solutions. The government has recently announced the implementation of the sixth cycle of the Large-Scale Solar programme, known as LSS6, which is expected to unlock between RM13 billion and RM15 billion in private investments .

The LSS6 programme offers a total quota of 2,500 megawatts of solar capacity, including 1,250 megawatts paired with Battery Energy Storage System technology, as well as a dedicated 150-megawatt allocation for Bumiputera companies in Peninsular Malaysia . The programme is expected to create between 15,000 and 20,000 job opportunities during the development and construction phases, while reducing carbon dioxide emissions by approximately 2.6 million tonnes annually.

Kenanga Investment Bank noted that the expanded tender quota under LSS6 implies a blended investment intensity of RM4.9 million to RM5.7 million per megawatt of solar capacity, inclusive of battery energy storage systems . This is significantly higher than the conventional benchmark of RM3 million per megawatt for utility-scale solar developments, due to the additional costs associated with battery cells, power conversion systems, energy management systems and grid integration.

ES Sunlogy's Position to Capture LSS6 Opportunities

Building on its operating renewable energy assets and proven experience, ES Sunlogy is well-positioned to pursue future opportunities under the Large Scale Solar programme and other renewable energy initiatives introduced by the Malaysian government. The company has demonstrated its ability to execute large-scale solar projects through its successful Junjong and Selarong plants .

Kenanga Investment Bank said that engineering, procurement, construction and commissioning contractors with stronger balance sheets and proven execution capabilities should be better positioned to secure technically more demanding packages under LSS6 . Kerjaya Prospek's investment in ES Sunlogy could potentially enhance the company's competitive position in bidding for these projects.

RHB Research noted that the subscription price values ES Sunlogy at a trailing 12-month price-to-earnings ratio of 8.9 times, which it considers reasonable for a company with a market capitalisation of RM203 million . The research house added that other mechanical and engineering players are currently trading at forward P/E multiples of above 10 times.

Leadership Perspectives

ES Sunlogy managing director Khor Chuan Meng welcomed Kerjaya Prospek's investment, describing it as a strong endorsement of the company's business model, execution capabilities and long-term growth strategy . "As demand for high-quality M&E engineering solutions and renewable energy infrastructure continues to grow, we believe this investment further strengthens our corporate profile and positions us well to capture emerging opportunities in both sectors," Khor said.

Khor added that since its listing, ES Sunlogy has continued to execute its growth plans through securing sizeable M&E engineering projects, expanding its renewable energy portfolio and strengthening its regional presence . "With the support of our strategic shareholders and business partners, we remain committed to delivering sustainable value while contributing to Malaysia's infrastructure development and energy transition agenda," he said.

Kerjaya Prospek's Tee Eng Tiong said the investment would not yield an immediate earnings impact as the 9.09% stake is too small to give the group significant influence over ES Sunlogy under Malaysian Financial Reporting Standards 128 . However, the strategic partnership is expected to open doors for future collaboration opportunities .

Market Reaction

Kerjaya Prospek's share price closed six sen or 2.56% higher at RM2.40 on the day of the announcement, giving the group a market capitalisation of RM3.04 billion . ES Sunlogy closed up half a sen or 1.75% to 29 sen, slightly lower than its initial public offering price of 30 sen apiece, translating to a market value of RM223 million .

RHB Research maintained its "Buy" call on Kerjaya Prospek with a target price of RM3.19, while noting that a major catalyst for the construction group would be involvement in a major infrastructure project such as the Penang Light Rail Transit.

Kerjaya Prospek's acquisition of a strategic stake in ES Sunlogy represents a well-timed move to capitalise on the growing renewable energy market in Malaysia. With the LSS6 programme expected to attract significant private investment and create numerous opportunities for experienced players, ES Sunlogy is well-positioned to benefit from its track record and existing renewable energy assets. The strategic partnership between the two companies could also lead to future collaboration on integrated engineering and renewable energy projects, aligning with Kerjaya Prospek's commitment to building a resilient and future-ready business ecosystem.