It's that time of the year, where Suruhanjaya Tenaga calls for another round of LSS tenders. LSS5, dubbed LSS Petra, has 2000 MWac to be awarded out this time around, a huge number compared to LSS4 with around 850 MWac. Solar players should be busy preparing to submit their proposals, which has a deadline of 25/7/2024.

Needless to say, I will not be participating.😂

But economically, it will be of interest to many listed companies in Bursa. So, let's just quickly go through some of the key points from the announcement.

1. LSS5 will have capacity of 2000MWac split into 4 packages. Package 1-3 are the typical rooftop or on ground solar farm that we are familiar with, while Package 4 will be floating solar.
2. The LSS farms will be expected to be operational by 2026.
3. Package 1 of 250MW will be opened only to 100% Bumiputra companies, mainly targeted to SMEs. Each farm will be between 1 to 10 MW.
4. Package 2 is 250MW, for companies with at least 51% Bumiputra equity holdings, and must be 100% local owned. Each farm will be between 10-30 MW.
5. Package 3 and 4 are 1000MW and 500MW respectively, for Malaysian companies with at least 51% local equity holdings or a consortium with at least 51% local shareholders. Each farm is between 30 MW and 50MW.

Basically, of interest to investors of Bursa Malaysia would be mainly focused on Packages 2 and 3. To my understanding, floating solar is needlessly complicated and expensive so I would think it's not that feasible and will probably be not that profitable.

Frontrunners could be previous LSS4 winners; $SLVEST / 0215 (SOLARVEST HOLDINGS BERHAD) $TENAGA / 5347 (TENAGA NASIONAL BHD), MKLAND and so on.
Other potential bidders could be the solar players like $MFCB / 3069 (MEGA FIRST CORPORATION BERHAD) samaiden sunview advpkg ock pekat etc etc
I think most people would already be anticipating that and it's quite a "no brainer" that these types of companies will be the direct beneficiary if there's more activity in the solar energy space.

Lesser known beneficiaries, and the angle that I would personally be more keen to look at, are the supply chain players. The typical adage, would be to sell shovels during a gold rush, rather than mining gold yourself.

These supply chain players could be the likes of...
cable makers: scgbhd, (and now KUB as well)
aluminium frames: PA
solar packaging: $MASTER / 7029 (MASTER-PACK GROUP BERHAD), L&PBHD, and so on,
silicon for solar: OMH and PMBTECH
Land owners of northern states like BDB

and others...
While we may not know which company will win the LSS5 bids, we know for sure they need to buy their materials from somewhere...

Of course, as usual and again, to what extent each player will benefit will need to be determined by further due diligence.