Greenfield, Green-Steam

IPO information

Key points

• GENERGY is a biomass boiler/turbine EPCC IPO that is venturing into supplying biomass-fired green-steam to industrial customers via “mini-IPP” style asset ownership model.
• Biomass offers substantially higher IRR vs solar with RM2-3bn market potential. We estimate 30sen/share FV this segment.
• Initiate with a BUY and TP of RM1.30. This is still an early-stage investment, valuations reflect it, with headroom for re-rating.

GENERGY vs BMGREEN

Investment fundamentals

Source: Company data, NPS Research, December 2025

"Mini-IPP" without the grid hang-ups

• We estimate the biomass-for-steam industry could be worth RM2-3bn in capex for Malaysia alone, based on the roughly 40-60% of empty fruit bunch (EFB) biomass that is currently underutilized. While lagging Malaysia in maturity, Indonesia’s market could be over double this size.
• GENERGY is still at an early stage - pursuing brown/greenfield prospects. We conservatively estimate this business has a potential FV of RM150m (30sen/share), with a hefty 50% discount on NPV. Critically, we do not think this is reflected in the IPO price.
• The IPO price of RM1.00 implies a PER of 14x FY26E. This is a substantial discount to GENERGY’s direct comp, BM Greentech, which averaged 19.5x PER over the past 3 years. This looks cheap in our view, given GENERGY’s existing EPCC core business boasts 21% GP margin compared with BMGREEN’s 17% and 18% ROE against the latter’s 10%. The discount is largely the function of slower earnings growth: +5.9% 3yr NP CAGR (FY26E) compared with BMGREEN’s +21.5% (FY27E, ended-March).
• However, we anticipate earnings growth will accelerate in FY27 once the aforementioned biomass-for-steam asset ownership segment starts generating income (18-24month construction lead time). Critically, the IRR on biomass projects should be substantially better than solar, which has been supporting BMGREEN’s growth advantage.
• One key advantage that biomass-for-steam has over solar, is that it bypasses much of the regulatory rigamarole that solar projects have to deal with due to the exposure to the grid. GENERGY’s offering will specifically aim to displace natural gas boilers that currently produce heat/steam for industrial users. Management claims it can deliver up to 30% savings on energy costs in addition to slashing scope-1 CO2 emissions due to biomass’ biogenic nature.

Bull-case FV: RM1.60

• Initiate with a BUY and a target price of RM1.30 on 18x FY26 PER.
• If we lift the 50% discount on the NPV of the biomass-for-steam segment, it would add another 30sen/share to our valuation for a bull case FV of RM1.60.

GENERGY growth outlook

IPO summary

Source: Company data, NewParadigm Research, December 2025

IPO structure

IPO: Utilization of proceeds

GENERGY will raise RM75m from the IPO, of which we estimate 70% will be directly supporting earnings growth - acquisitions and selected capex.

Acquisitions (51%): The largest allocation of proceeds, RM38.2m, is allocated for acquisition of biomass for steam projects over the next 36 months. Management indicated that it is currently exploring several prospects, both greenfield and brownfield. We expect any brownfield acquisition to be earnings accretive but greenfield could take ~18 months.

Capex (17%): RM12.5m of the proceeds is allocated for capital expenditure over the next 2 years. The bulk of this allocation is for machinery and equipment (RM8.5m), while another RM3m is for enhancement of the headquarters. Aside from the HQ enhancement, the capex should improve productivity and boost capacity overall.

Indonesia (7%): The group also plans to invest RM5.5m over 24 months to expand the Indonesian operations, primarily with rental and staff costs for a sales office in Jakarta as well as service centers in Pekanbaru and Sulawesi. GENERGY currently has service centers in Medan and Banjarbaru. Indonesia is a key market and we expect investments here to revenue accretive by FY27, but lift OPEX in the short term.

Digitisation (7%): GENERGY is allocating RM5m for digitalization of the business systems and processes. As it stands, there are a number of business functions that are manual and/or standalone systems that can be upgraded - project execution, inventory management, after-sales management, ERP and cybersecurity. The prospectus also alluded to AI integration but without specific applications. We see this investment as necessary and cost-accretive, but not a revenue driver.

R&D (5%): RM4m has been allocated for research and development, but interestingly, it will not result in a dedicated R&D department. Instead, the cash will be deployed into the existing technical team. We do not expect any capitalization of R&D, instead, this will be incremental OPEX. The focus of the R&D appears to be testing new biomass feedstock as well as securing additional certifications. We see this as a necessary spend, but revenue support will be limited.

Listing expenses (13%): RM9.8m has been allocated for listing expenses, which is relatively high against the mid-single digit benchmark.

IPO: Utilization of proceeds

The bird in the bush: Steam as a service, "mini-IPP"

Wasco Greenergy (GENERGY) is listing as a biomass EPCC company but with explicit ambitions to expand into the development and ownership of biomass-for-steam plants. At the implied listing PER of 14x FY26E (RM1.00/share), we think the potential of the latter is not yet priced in. In short, we see GENERGY as an early stage play in the development of biomass power in Malaysia that has potential to scale into Indonesia.

There has been a sizable latent potential in biomass power that has been under-exploited in Malaysia and Indonesia. But this is changing. Between long-term pressures to decarbonize and the elevated price of natural gas post-liberalization, many industrial users will be looking for cheaper and more sustainable alternatives. Biomass-powered steam can solve this problem and GENERGY well positioned to capitalize on this opportunity via an all-in build, own and operate model.

For Malaysia alone, we estimate the upper limit of the market could be as large as RM2-3bn in capex, based on the 17-20mil MT of empty fruit bunch (EFB) produced annually. For perspective, this could displace as much as 56% of the total natural gas consumption annually in Peninsula Malaysia alone.

There is a large variance to estimates, but the potential energy cost savings of a
biomass plant over natural gas could be as much as 30%. Beyond the direct
economics, biomass as a biogenic source of fuel offers to slash scope-1 CO2 emissions of end-users as well. GENERGY’s key strength is its proven boiler track-record and engineering capabilities. However, developing feedstock supply chains and sourcing capital to sustain growth will be key challenges to solve going forward.

Mapping the biomass-to-steam opportunities and challenges

The bird in hand: EPCC

GENERGY’s existing core operations should not be overlooked either, as it is a solid cash-generating business that will help fund the aforementioned opportunity. In short, GENERGY is an EPCC for biomass boilers as well as steam turbines, primarily for customers that are in the palm oil sector. GENERGY stands out with a GP margin of 25-28% and an ROE of 18% historically.

Less than half the revenues come from Malaysia (44%, FY24A), with Indonesia making up the single largest market (50%, FY24A). Malaysia is primarily a boiler market, where GENERGY is the #2 player by market share. However, GENERGY’s market share of steam turbines in Indonesia is over 67% (non-utility applications). Note, GENERGY distributes steam turbines manufactured by Japan’s Shinko.

GENERGY has 316 turbines in the field with a cumulative capacity of 488MW.

Biomass-to-steam: How big is the market?

We estimate the potential market size for biomass-to-steam is about RM2-3bn in
Malaysia, from a capex perspective.

We anticipate the LT ceiling for the industry will be supply-limited - a function of the annual biomass production. Or more specifically, palm oil empty fruit bunch production as planted area in the country is near its terminal ceiling as well. Only yield enhancement can improve volumes.

On the demand side, there is ample headroom. Industrial consumption of natural gas for thermal applications will be the key target market for the biomass-to-steam business that GENERGY is targeting. Currently industrial users consume almost 160mil MMBtu worth of natural gas each year (excluding non-energy uses). The gas is used for thermal processes, for example heating and drying for a glove manufacturer. In a majority of applications, the natural gas is burnt in a boiler to produce steam for said thermal applications.

There are three main catalysts for the adoption of biomass.

• Firstly, biomass could be cheaper - as much as 30% cheaper, according to
  management. Since the liberalization of gas tariffs in 2022, the price of gas has
  gone from <RM30/MMBtu to averaging ~RM45/MMBtu.
• Secondly, as a global energy commodity, prices are subject to external volatility with risk to the upside as seen during the onset of the Russia-Ukraine war.
• Thirdly, with emission targets looming on the horizon, firms, especially exporters and MNC’s have growing incentive to decarbonize. As a biogenic source, biomass does not have any scope-1 CO2 emissions.

It also helps that industrial users will not be using biomass for power, which would
introduce additional complexity with grid regulations.

Nestle's biomass adoption case-study

Supply assumptions

High-level back-of-envelope calculations suggest that the sheer volume of annual EFB produced by the palm oil industry alone could displace up to 56% of natural gas consumption. This is indicative of the ceiling but not one that is not likely to be achieved as fully utilizing all EFB is likely to be impractical. Of course, there are other biomass sources.

Malaysia currently produces about 94m MT of fresh fruit bunch (2024), with an EFB ratio of 19-21%. This translates to 18-20m MT of EFB per annum. A 2024 study published in the Journal of Sustainability Science and Management estimated that up to 77% of EFB was either sent to landfills, given away or returned to plantations. We think 62% might be the realistic ceiling on available EFB, based on volumes sent to landfills or returned to planters. In turn, that translates to roughly <12mil MT of available EFB. Caloric values of EFB has a wide variance, pending qualities like shredding and moisture content. Broadly we estimate it could displace as much as 41% of current industrial natural gas consumption if fully utilized - which is unlikely. A more practical assumption would be ~30%.

Biomass vs natural gas potential

Biomass potential: about 77% of EFB could be better utilized

Solving EFB's poor fuel characteristics

EFB has been abundant and cheap. In fact, almost 20% of EFB produced is estimated to be discarded in landfills while another 40% is returned to the plantations where it is used for mulching. So, why hasn’t it been more widely adopted for biomass applications?

While palm oil mills have generally been the early adopters of biomass, the historic
preference has been to burn other by-products like the fibers and palm kernal shells that boast better fuel characteristics compared with EFB. In turn, biomass adoption outside of the plantation sector has been limited. Energy Commission data shows biomass making up only ~0.2% of total energy produced annually in Malaysia.

Renewables primary energy supply in Malaysia

The key challenges with EFB for biomass have been:

• The relatively high moisture content (65%-75%)
• Shredding the EFB is demanding on equipment and a cost
• Highly fragmented supply chains with various middlemen to navigate

1. High moisture content

Moisture content has an inverse relationship with the energy extracted from EFB. The additional weight also translates to higher transportation costs that compounds the relatively high distance between remote mills and potential users. The high water content also leads to rapid degradation of EFB and requires processing within a few days. This also limits storage of buffer feedstock.

What has changed: Mills are now incentivized to screw-press EFB for additional residual non-edible oils. Once considered inedible waste, these residual oils are now being used as a feedstock for sustainable aviation fuels. Recall that sustainability regulations prohibit virgin edible oils from being used as SAF feedstock to prevent competition with food supplies and potential increase in deforestation. The unintended benefit of this new demand is post-processed EFB with a lower moisture content of 42-50%.

2. Shredding is tough

EFB has to be shredded before burning but its characteristics make it difficult to
process. Raw EFB is bulky at roughly 20kg. It is highly fibrous, which results in
entanglement and makes it highly abrasive to machinery driving up operating costs. In turn, relatively specialized and heavy-duty shredders are required to process EFB before it can be a viable fuel. The high cost and low benefit to mills means that investment in good shredders is not widely adopted.

Solution: Pending the location of a prospective project, GENERGY’s solution to this will be investing in the shredders themselves to ensure supply of EFB. The added benefit might be better control of the quality of feedstock supply.

3. Fragmented supply chains

Lastly, securing supply remains a major challenge. Feedstock supplies are highly
fragmented, and a network of capricious middlemen need to be navigated. While there are reference “market prices”, these are unreliable and quality of feedstock varies wildly. Centralized procurement, even from a large planter, is often not viable. And this is before considering disruption from adverse weather. Recall that LT storage of EFB is not practical as the high moisture content results in rotting.

Management: For industrial customers that demand dependable supply of steam (like what they would alternatively enjoy with natural gas), feedstock is a major challenge that GENERGY has to manage. There are no silver bullet solutions. Since customers will not take on the operating risk, this liability will fall to GENERGY. This could emerge in the form of volatile input costs at best. At worst, it could mean disruption to client operations that could translate to higher liability. Critically, GENERGY has no direct experience, but having operated adjacent to EFB suppliers for over 2-decades, GENERGY will have some insights to navigating these hurdles.

GENERGY's key advantage - proven technology

In addition to more reliable supply, natural gas is a homogenous fuel that burns clean. In turn, biomass boilers have relatively straightforward operational and maintenance requirements.

In contrast, a big challenge for EFB biomass boilers is the fact that it has to handle a highly variable feedstock with poor fuel characteristics - low ash melting point, low calorific value, high abrasive property, low density/entanglement and high
impermeability. This results in issues like high wear and tear, the formation of soft sticky ash in the convection section that can reduce boiler draft and efficiency. In turn, biomass boilers typically require frequent cleaning and maintenance cycles. To manage these challenges, biomass boilers often blend EFB with other cleaner (but less available) biomass feedstocks like wood chips.

GENERGY claims that it has proven technology and has boilers that are currently
operating in the market that are able to handle at least 80% EFB as well as sustain
continuous operations for at least 3 months without cleaning. A planned maintenance shutdown every 3 months for about 5-6 days translates to a full-year availability of ~93.5%. This might still preclude certain customers that require better uptimes, but for the most part appears to be a reasonable maintenance cadence. However, it should be noted that we do not have an easy way to verify management’s claims of its technological strength.

In fact, management takes pride in the group’s engineering capabilities that allow it to put together custom solutions for its customers. This is crucial for building fit for purpose boilers that can accommodate the on-site limitations of its industrial
customers.

This strength will have the added benefit of improving the economics of a given build-own-operate plant, and any upside from efficiency will accrue to GENERGY.

Sample design of a total biomass steam energy system package

Its all about the money: the economics of biomass

Finally, we circle back to natural gas. In the short term, we anticipate some downside risk to prices. But longer term, we expect it to remain in the RM40-45/MMBtu range. This roughly translates to RM120-140 per tonne of steam for natural gas. In comparison, GENERGY is claiming it can supply biomass-produced steam at least 30% cheaper.

With natural gas prices fully liberalized since 2022, pricing is now determined by the Malaysia Reference Price (MRP) plus a “beta” for the cost of distribution. The MRP is a function of the value of LNG exports over the volume, but is broadly tied to the price of crude oil via Brent and the Japan Crude Cocktail (JCC) benchmarks.

It is worth noting that the MRP has seen some downward pressure in recent months. The latest MRP in August is RM36.37/MMBtu is 13% lower than 2024's average of RM41.84/MMBtu. The lower natural gas prices could be a short-term dampener on potential gas-to-biomass conversions.

Longer term however, natural gas prices could also have more upside risk for users. Since liberalization, the MRP has averaged RM42.8/MMBtu, with a high of RM58.57/MMBtu at onset of the Russia-Ukraine war. In turn, this translates to energy price risk for users.

On the other hand, EFB prices are difficult to track with indicative pricing ranging from RM2 to RM12 per MT. While currently in abundance, there could be increased competition for EFB in the future that drives up prices. There are already companies that look to convert EFB into pallets to export as a energy feedstock or non-energy uses like pulp for paper.

That said, one of the biggest potential benefits of biomass - lowering scope-1 emissions, could diminish the emphasis on relative energy costs against gas going
forward as well.

Malaysia reference price - used to price gas in Malaysia

After customer adoption, capital is the next limitation

While the opportunity set has a relatively high ceiling, the more immediate limitation on GENERGY will be capital. The group currently boasts a net cash position of ~RM9m and we expect it will expand to ~RM60-70m with the IPO proceeds as well as the recovery of some outstanding receivables.

Assuming a net gearing of 60%, this points to roughly RM200m of additional debt
headroom or up to ~RM280m in potential investment capacity on a 70:30 debt:equity split. For context, we estimate that a single 70TPH (steam tonnes per hour) biomass plant will cost about RM50-60m in capex, not including the land acquisition costs which could add several million ringgit more to the initial outlay.

Additionally, the lead-time to construct a new biomass plant is about 18-24 months. Even with a 5-year payback period, this means the group will be running an overall cash deficit over the next 5 years, assuming a steady stream of projects.

In turn, we conservatively anticipate that GENERGY will only be able to take on one project per year for the next several years. Including some buffer for land acquisition costs, this would translate to more than RM250m in outlay over the next 5 years.

We estimate it will take till FY29 before this segment will break even and maybe only see more steady-state earnings in FY30. This business should be able to fund its own growth without needing a cash call, but if GENERGY intends to accelerate the growth and take on more than one project concurrently, it would require more capital.

Recall, RM38.2m (51%) of the IPO proceeds is allocated to acquisition/capex of
biomass assets, including brownfield opportunities.

Biomass asset-co segment forecast

Our key assumptions:

• One new 70TPH project each year with capex of ~RM55m.
• First project is brownfield and immediately profitable.
• Equity IRR of each project to be around 15%.
• Revenue of ~RM85-100 per tonne of steam, escalating over time.
• Gross margins of ~30%.
• Finance costs of 6%.
• Debt:Equity ratio of 60:40

Asset business: estimated FV of RM150m

We estimate that the new biomass asset segment could be worth ~RM300m, based on a 2-stage discounted cash flow model.

At the same time, we acknowledge that there is substantial execution risk. GENERGY has no track record of asset ownership and we have no explicit reference for the profitability of such a unit.

In turn we think a healthy 50% discount should be applied to the aforementioned
valuation, giving a fair value of RM150m. As management delivers on key project
milestones and builds a more visible funnel of prospective projects, we foresee reducing this execution risk discount.

Biomass asset-co segment valuation

Valuation methodology: PER

We opted to keep our valuation methodology simple and stick with PER. However, we can work out the implied value of the current underlying EPCC business, if we were to include the aforementioned RM150m FV for the biomass asset segment.

We peg GENERGY’s target PER multiple at 18x FY26E, which is -0.7SD below the
T3year average of BM Greentech’s blended forward 12M PER. This translates to a
target price of RM1.30 per share.

We think this is fair, given GENERGY boasts historically higher margins and ROE’s compared with BMGREEN. However, GENERGY’s ST earnings outlook is a little softer at +12.7% YoY for FY26. We delve into the head-to-head comparison of both stocks in a following section.

Finally, if we account for the potential fair value of the biomass asset-co, the underlying valuation of the EPCC business is only 15x FY25 PER.

Valuation methodology: RM1.30 TP

Valuation benchmarks

BM Greentech

The most direct comp to GENERGY is BM Greentech. The latter sells biomass boilers in Malaysia and Indonesia. BMGREEN also has ~30% market share compared with GENERGY’s 14% in Malaysian biomass boilers.

However, BMGREEN has diversified into water treatment and solar over the past few years. In some ways, both will remain peers in renewable energy generation, albeit with BMGREEN focused on solar and GENERGY in biomass.

BMGREEN has a larger balance sheet (roughly double GENERGY’s NTA) and has also ventured into asset ownership earlier. In turn, BMGREEN boasts stronger earnings trajectory. Consensus estimates has BMGREEN growing at +21.5% 3yr CAGR (FY27, ended-March), compared with the modest +6% CAGR (FY26) for GENERGY.

BMGREEN is a sizable competitor in Malaysia

BM Greentech PER - T3yr average of 19.5x

GENERGY - smaller, customized, better margins

While GENERGY competes directly with BMGREEN in key markets, management
claims that the key differentiator is GENERGY’s engineering design that allows for more customized solutions.

This allows for higher margins for the EPCC segment - almost 4ppt advantage in
EBITDA margins. Additionally, GENERGY’s ROE’s of 12% (FY24) is almost 2ppts above BMGREEN’s ROE of 10% (FY25 ended-March).

But crucially for the biomass-for-steam segment offered to industrial users, the
customization allows for solutions that are built for purpose to the client’s site
conditions and integration into existing production lines. This is distinctly different from supplying boilers to palm oil mills that tend to have more space for deployment in addition to being asset owner/operators that understand biomass boilers well.

Margins - GENERGY boasts higher margins

Profitability - GENERGY boasts higher profitability

Brief history of BMGREEN:

BM Greentech Berhad (formerly Boilermech Holdings Berhad) began in 2005 as a
biomass boiler design and manufacturing company serving the palm oil industry. It later because an associate of QL Resources Bhd in 2010 when the latter acquired a 53.1% stake. Boilermech was listed on the ACE market in 2011 before transferring to the main board in 2014.

The group has since evolved into a broader green technology player, venturing into
water treatment through BM TEK Sdn. Bhd., and later into solar energy via Tera VA Sdn. Bhd. To reflect this change, the company in 2023 rebranded as BM Greentech. Solar capabilities were further expanded via the 2024 acquisition of Plus Xnergy Holding Sdn. Bhd. (PXH).

BM Greentech’s operations are primarily anchored in Malaysia and Indonesia. Malaysia remains the Group’s core market, contributing 82–96% of revenue over FY21–25. Indonesia’s share increased from 4% in FY21 to 18% in FY24 as project activity ramped up. Overall, Malaysia continues to dominate the Group’s geographical revenue mix, while Indonesia provides a smaller yet growing contribution.

Boilermech history

BMGREEN revenue

BMGREEN's segments

Bio-energy segment (54%)

BMGREEN’s bio-energy segment is the group’s original core business. It covers design, manufacturing, installation and commissioning of biomass boiler systems for palm oil mills, power plants and other industrial users. These systems enable clients to utilise agricultural by-products such as palm biomass, rice husks and wood chips as renewable fuel. The segment operates mainly in Malaysia and Indonesia, supported by a manufacturing facility in Surabaya and operations in Jakarta and Medan. Beyond its core markets, the group also supplies bio-energy solutions to customers in Africa, Ecuador, the Philippines, Papua New Guinea, Thailand and Vietnam.

Solar energy segment (35%)

This is BMGREEN’s fastest growing segment. The group offers EPCC of solar
photovoltaic (PV) systems for commercial, industrial and residential users. The segment is supported by Tera VA Sdn. Bhd., which operates in Selangor and Kota Kinabalu. Following the integration of Plus Xnergy Holding Sdn. Bhd. (PXH), the segment now has broader capabilities in owning and operating utility-scale solar projects and battery energy storage systems (BESS). Together, the solar division maintains marketing and operational presence across Selangor, Kuala Lumpur, Perak, Penang, Johor and Kota Kinabalu.

Water treatment segment (11%)

The water treatment segment provides EPCC services for industrial wastewater
treatment across industries including palm oil, food, wood, paper and pulp. Its offerings cover raw water treatment, industrial wastewater systems, POME treatment, biogas capture and membrane-based potable water treatment. This segment operates under BM TEK Sdn. Bhd., with coverage across Kuching, Bintulu, Miri, Sandakan, Johor Bahru and the Klang Valley, and has also expanded into Indonesia through PT BM TEK Indonesia.

BMGREEN segmental revenue and PAT

Other valuation benchmarks

We also cross-referenced other valuation benchmarks when considering the
appropriate multiple to apply for GENERGY. We looked at the multiples for broader EPCC players, RE asset owners, and edible oil processing equipment players for comparison. Overall industry forward multiples were between 21.4x, 23.4x and 20.9x respectively. In particular we note the disparity between EPCC trailing average multiples (14.9x) against asset-owners (21x), which suggests as GENERGY delivers on its new venture, the stock should rerate further.

EPCC players are currently trading at around 21x forward PER

Valuations of RE EPCC's are relatively low at 14x

Valuations of RE asset-owners is higher compared with EPCC-focused peers

Valuations of RE asset-owners (mostly solar) is higher compared with EPCC's

Valuations of global edible-oil equipment suppliers

Global edible-oil equipment suppliers trade at relatively high multiples

GENERGY customer dependencies

GENERGY has a wide base of customers with no single customer contributing 10% of total revenue. GENERGY’s has roughly 1,500 customers in total in its overall pool. The total contribution from the top-5 customers has averaged less than 20% in previous years.

GENERGY’s geographical distribution is also broadly in-line with regional palm oil
production with 45% of revenues from Indonesia and 46% from Malaysia historically.

However, for our thesis, GENERGY will be breaking away from its more traditional
palm-oil customers towards industrial customers for the biogas-for-steam asset
segment.

GENERGY top-5 customers in each year

Geographical distribution of revenues

GENERGY supplier dependencies

GENERGY has high concentration risk with only one of its suppliers which is Japan’s Shinko. Shinko supplies steam turbines to GENERGY, a technology that GENERGY is highly dependent on. Overall, Shinko makes up about 21% of total procurement historically. However, the rest of GENERGY’s supplier concentration is low. Its top-5 suppliers have averaged ~35% of total procurement over the years and excluding Shinzo, no single supplier exceeds 5%.

About Shinzo

GENERGY’s relationship with Shinzo spans 20 years and we foresee the relationship to persist. GENERGY holds the after-sales support role for the turbines, which is a crucial recurring income stream for the group.

All the turbine parts are made by Shinko Ind. Ltd. in Japan. For smaller turbine models, these parts are sent to Shinko Industries Malaysia, where they are assembled with other components like alternators, valves, and electrical parts. The larger turbine models are fully assembled in Japan by Shinko Ind. Ltd.

The industry acceptance of Shinzo turbines is most notable in Indonesia, where
GENERGY has a a whopping 67.3% share of non-utility steam turbine market share. Shionzo’s turbines are available in both single-stage and multi-stage configurations, with output capacities ranging from about 1MW to 30MW. This allows them to support a wide range of project sizes, from small factory systems to larger biomass power plants. Shinko turbines are particularly effective in cogeneration settings, where they generate electricity and supply process steam at the same time. This dual output improves energy utilization and reduces waste. In sectors like palm oil processing, the use of Shinko turbines has enabled companies to lower energy costs and support decarbonization by turning biomass waste into efficient, usable power and heat.

Shinko’s steam turbines are built to perform reliably in harsh industrial environments, including tropical regions. They include key protective features such as an axial displacement sensor that shuts down the turbine if excessive blade pressure is detected, and gland steam ejectors that prevent moisture from entering the oil system. These design elements help avoid common failures and ensure long-term, safe operation.

GENERGY's supplier breakdown - high exposure to Shinko

Company history

Wasco Greenergy

Wasco Greenergy was founded in 2002, when Wasco Berhad took over Wasco
AgroTech, a company that made steam turbine systems and equipment for palm-oil mills. This became the starting point of their energy-systems business. In 2003, the group expanded into Indonesia by setting up PT WATI in Medan to provide repair and maintenance services for customers.

In 2006, the company grew further when Wasco Thermal Sdn Bhd (WTSB) was formed. That year, it completed its first biomass steam energy system and heat recovery steam generator (HRSG) project in Malaysia. It also started taking projects overseas, installing energy systems in Indonesia and Thailand. This marked the company’s first steps into regional markets.

Between 2007 and 2009, Wasco Greenergy continued expanding around the world. The company secured projects in Guatemala, Singapore, Cameroon, Costa Rica, and Ivory Coast. It also improved its technology by becoming a licensed partner of ERK Energy Systems, giving it access to more advanced steam-energy designs.

Over the next few years, the company achieved several major milestones. It completed its 100th steam energy project in 2012, partnered with Shinko Ind. Ltd. in 2013 to assemble steam turbines in Malaysia, and delivered its 1,000th turbine system in 2015.Between 2016 and 2018, the company expanded into new countries, secured high-pressure system projects, introduced ESP products, formed Wasco Saito, and delivered a large 10MW turbine for a customer in Indonesia.

Recently, the company improved its customer support with a new service centre in
Sandakan in 2019 and delivered its biggest HRSG hot-water system in 2020. To bring all its renewable-energy businesses together, the group created Wasco Greenergy Sdn Bhd on 5 December 2023 and later turned it into a public company called Wasco Greenergy Berhad on 20 June 2025.

Notable substantial shareholder: Tema Energy

Tema Energy Ventures Sdn Bhd is an investment holding company established in 2005. Its shareholders are long-serving engineers and managers within the Wasco Group who have been involved in steam system design and project execution for many years. Their experience covers biomass boilers, HRSG units and steam turbine generator systems, making Tema Energy an important technical partner in the early development of Wasco Greenergy’s steam and thermal solutions.

Before the IPO, Tema Energy owned forty percent of Wasco Thermal Sdn Bhd, the
subsidiary that manages steam boiler and steam turbine projects. Through the pre-IPO acquisition, Wasco Greenergy purchased this entire stake to fully consolidate WTSB. Tema Energy holds an effective 11.1% stake in GENERGY pre-IPO, which will be diluted to 7.5% post-listing.

Lock-up period: Tema Energy and its individual shareholders are subject to a three-year staggered lock-up. In the first year, all their shares are restricted from sale. In the second year, eighty percent remains restricted. In the third year, fifty percent stays under lock-up. This structure supports market stability and reflects their continued commitment to the company.

Key management:

Management will be a critical success factor as GENERGY undertakes its new venture into asset-ownership. The senior management is highly experienced in the broader biomass sector, but has limited direct experience with asset ownership.

Lee Yee Chong - Group Chief Executive Officer

Lee Yee Chong, has been with the Wasco Group since 1995. He graduated with a
Mechanical Engineering degree from the University of Malaya in 1993 and began his career as a Project Engineer at ABB Industrial Systems. Within Wasco, he has held key roles across several divisions, including Chief Operating Officer of the Renewable Energy Division in 2014 and Chief Executive Officer of the same division from 2016 to 2019. He later led the Industrial Engineering Unit as CEO from 2019 to 2024. With close to three decades of experience in the Group, Mr Lee oversees the overall direction, operations, and growth of GENERGY. He was appointed Group CEO in September 2024.

Ooi Giap Hwa - Group Head of Finance

Ooi Giap Hwa, started his career at BDO Malaysia in 1997 and qualified with the
Malaysian Institute of Certified Public Accountants in 2000. He later joined Taliworks Corporation Berhad as Financial Accountant before moving to Wasco Berhad in 2003 as Finance and Admin Manager. Over the years, he has managed financial reporting, corporate finance, tax planning, compliance, and treasury functions for various divisions within the Group. His senior roles include Head of Finance for the Industrial Services Division (2019–2023) and Senior Vice President of Operation Finance at Wasco Management Services (2023–2024). A member of both MICPA and MIA, Mr Ooi became Group Head of Finance in September 2024 and is responsible for the financial management and reporting of GENERGY.

Tee Kian Lim - Chief Operating Officer

Tee Kian Lim, holds a Mechanical Engineering degree from the University of
Hertfordshire. He began his career in 1995 as a Design Engineer at Vickers Hoskins, focusing on steam energy system designs. He joined WTSB in 2006 as Engineering Manager and was promoted to General Manager in 2013, a role he held for over 12 years. In January 2025, he became Chief Operating Officer of WTSB and is responsible for operations, engineering activities, and project delivery for the Group’s steam and thermal energy solutions. Mr Tee is also a shareholder of the Group, holding 37.306 million shares indirectly following the IPO.

Board of directors:

GENERGY boasts a 50% independent board, including a non-independent chair.
However, all board committees are majority independent. The board also boasts a 50% composition of women directors. Notably, the board is relatively small at only 4 members overall including the chairman. Both the chairman and the sole non-independent director have worked with the Wasco Group for over 2 decades each. Both of the independent directors, Ng and Roslina, are fairly recent appointments,
ahead of the listing exercise.

Halim Bin Haji Din - Non-Independent Non-Executive Chairman

Halim Bin Haji Din (aged 79) was appointed as Non-Independent Non-Executive
Chairman on 17 June 2025. Halim has been a INED with Wasco Bhd since 2002. He has over 30 years of experience working with multinational companies and global consulting firms, including 18 years in the oil and gas sector. He previously served as a board member of Caltex / Chevron and worked as Regional Financial Adviser for Caltex Petroleum Corporation in Dallas, overseeing investments for Asian operations. Halim also built a strong career in corporate recovery with Ernst & Whinney in London and later became Managing Partner of Ernst & Young Malaysia’s consulting division. He co-founded the IA Group after taking over Cap Gemini Ernst & Young’s consulting business in Malaysia. He has served on several major boards, including MMC Corporation, EPF, Takaful Ikhlas and BNP Paribas Malaysia.

Ramanathan A/L P.R. Singaram - Non-Independent Non-Executive Director

Ramanathan A/L P.R. Singaram (aged 57) was appointed as Non-Independent Non-Executive Director on 5 December 2023. He is an ACCA Fellow with over 25 years of experience in auditing, finance and corporate reporting. He began his career with PwC Malaysia, including two years at PwC London, handling audits, forensic work and financial due diligence. He joined Wasco Berhad in 2006 as Head of Group Internal Audit and rose through various senior roles, later becoming Group CFO of the Energy Division in 2013. He was appointed Chief Financial Officer of Wasco Berhad in May 2023.

Ng Ing Peng - Senior Independent Non-Executive Director

Ng Ing Peng (aged 69) was appointed as Senior Independent Non-Executive Director on 17 June 2025. She is a Chartered Accountant with wide experience across audit, corporate finance and senior management roles. She started her career at Penang Development Corporation before joining Thornton Baker in London, and later Ernst & Whinney. She has held key positions including Corporate Finance Manager at D&C Mitsui Merchant Bankers, Financial Controller for RSH Malaysia and Reebok Malaysia, Head of Operations at PB Securities and Director of Group Finance at CIMB Group. She also served as Executive Director and Group CFO of Petra Holdings and has sat on the boards of Red Sena Berhad, Petra Energy and Mr. D.I.Y. Group.

Roslina Binti Abdul Rahman - Independent Non-Executive Director

Roslina Binti Abdul Rahman (aged 57) was appointed as Independent Non-Executive Director on 17 June 2025. She holds degrees in business and an MBA and completed Harvard Business School’s Advanced Management Program. She began her career as an analyst and fund manager with Arab-Malaysian Merchant Banking Group. She later held roles in investor relations, asset management and investment management at Measat, AmInvestment Management and CIMB Principal Asset Management. She became Managing Director of Amundi Malaysia in 2008 and served as Group CEO of Valuecap Sdn Bhd from 2018 to 2021. She is currently an Independent Director of Pelaburan Hartanah Nasional Berhad.

Risks

We breakdown risks into a few broad categories. Firstly, the 3 key risks that pose a
threat to our investment thesis. Secondly, a broader scope of primary and secondary risks that the investors will also have to consider longer term.

• Execution risk: By far the risk to our thesis. GENERGY has no track record of asset ownership, even if it is highly adjacent to their current EPCC business model. This broadly includes risks with cost overruns on the development of the project, counter party risk, and securing feedstock (below). The first test will be securing projects at all, and the secondary test will be ability to achieve the intended ~5 year payback period. We estimated an implied fair value of RM150m in our valuation. Putting aside impaired capital invested, we think the underlying EPCC business values GENERGY at RM1.00 per share.
• Competition: GENERGY has sizable EPCC competitors in the space, most notably BM Greentech. While lacking direct engineering capability, has the resources and balance sheet to close the gap and compete for the same opportunities and drive down the economics via competitive bidding. There are also some private companies operating in this space, including MNC, ENCO Systems.
• Feedstock: The business model will not work if GENERGY cannot secure a reliable supply of EFB at a reasonable price. GENERGY will have performance
  commitments to its customers and any disruption in steam supply could have
  substantial liability for GENERGY. Pricing is also key, as the business model relies on the relatively savings biomass offers to natural gas. If biomass prices rise or natural gas prices fall, it could upend the economics of the business segment.

Risk assessment

Source: Company data, NPS Research, December 2025

Primary Risks

1. New business model risk:

Transitioning into BOO/BOOT steam-supply agreements changes the company’s risk profile from short-term EPCC revenue to long-term operational commitments. These projects involve financing requirements, operating and maintenance obligations, biomass supply reliability, and performance guarantees over extended contract periods. Underperformance, downtime, or higher operating costs could diminish returns. As this model is relatively new for the company, execution, technical, and financing risks are elevated during initial rollout.

• Probability: High. New business models bring uncertainties.
• Impact: Severe. Underperformance or downtime affects long-term returns.
• Mitigating factors: Existing technical expertise and careful project evaluation.

2. Biomass (fixed stock) risk

Biomass-fuelled steam systems depend on consistent supply and quality of EFB and fibre from palm oil mills. Variability in fuel moisture, volume, or quality can affect boiler performance and outcomes, leading to technical disputes or reduced efficiency. Rising biomass prices or export-driven demand (e.g., Japan, Korea) can also impact project economics. In Indonesia, ongoing plantation seizures and policy uncertainty could disrupt biomass availability or alter feedstock allocation for mills.

• Probability: Moderate. Biomass supply and quality vary across mills and seasons.
• Impact: Severe. Fuel inconsistency can cause performance issues, commissioning delays, and customer disputes.
• Mitigating factors: Design adaptability for varied biomass types, customer responsibility for biomass supply, experience operating
  under diverse fuel conditions, and alternative fuel-handling solutions.
  

3. Industry cyclicality

The palm oil sector, one of the company’s key customer segments, experiences significant cyclicality driven by CPO prices, exports, labour policies, and plantation profitability. When CPO prices fall, mills often slow or postpone investments in boiler replacements, turbine upgrades, and efficiency improvements. This creates fluctuations in EPCC demand and can lead to uneven revenue.

• Probability: Moderate. Palm oil and industrial segments both move with commodity and investment cycles.
• Impact: Severe. Prolonged downturns can suppress new contracts.
• Mitigating factors: Serving multiple industries and offering various steam-system technologies.

4. Business sustainability and execution risk

Wasco Greenergy’s revenue depends on continuously securing new EPCC and product orders, as its order book is non-recurring with no long-term maintenance income. As a lump-sum EPCC contractor, any delays may lead to revenue volatility or project cancellation. Exposure to Indonesia heightens this risk, as recent regulatory actions and plantation asset seizures may cause project disruption. Vendor reliability and complex integration of boilers, turbines, and control systems further heighten execution risk.

• Probability: Moderate. Project-based demand, supplier dependence, and Indonesia’s political uncertainty increase unpredictability.
• Impact: Moderate to severe. Any slowdowns or delays and termination would weaken revenue and margins.
• Mitigating factors: Long-standing relationships with its customers, its established track record of timely delivery, diligent monitoring of work progress, and a consistent pipeline of new proposals and quotations.

5. Geopolitical risk

Operating across Southeast Asia exposes the company to political changes, trade restrictions, and regulatory enforcement actions. Indonesia has seen increased intervention in the palm oil sector, including plantation and asset seizures, heightened military involvement in land oversight, and evolving biomass policies. Such actions can disrupt customer operations, delay project sites, or reduce demand. Cross-border logistics and approvals may also be affected during periods of political tension.

• Probability: Low. Regional developments regularly influence customer behaviour.
• Impact: Severe. Source disruption, plantation asset seizures will tremendously impact the supply chain causing project delays or customer which could affect revenue and profitability.
• Mitigating factors: Market diversification and monitoring of regulatory changes.

6. Competition risk

GENERGY operates in a competitive EPCC and boiler market with numerous local and regional players offering biomass, gas-fired, and steam-system solutions, such as Boilermech (Malaysia) and Thermax International (Indonesia-India). Price competition is high, and customers, especially palm oil mills which tend to be cost-sensitive. Competitiveness may also be affected by reliance on a single turbine supplier (Shinko) and foreign-exchange exposure for imported components.

• Probability: Low. Competitive bidding and cost-driven customer behaviour increase the likelihood of margin pressure.
• Impact: Moderate. Aggressive pricing may compress margins and reduce revenue.
• Mitigating factors: Niche expertise in biomass systems, long-standing customer relationships, exclusive turbine distributorship,
  accumulated project track record, and multi-country market presence.

7. Regulatory, licensing and political risk

Wasco Greenergy operates across Malaysia, Indonesia, Thailand, and Japan, exposing it to evolving regulations on environmental standards, boiler emissions, construction permitting, cross-border procurement, and equipment imports. Changes in these rules may increase compliance costs or delay project approvals.

Specific regulatory sensitivities:

• Dependence on renewable energy incentives: shifts in Malaysia’s biomass support schemes may affect project viability.
• FiT incentive structure: locally manufactured boilers currently receive an additional 0.5sen/kWh, any revision of this bonus would influence competitive positioning.
• EU clampdown on palm oil imports: stricter EU sustainability rules may reduce downstream demand for palm oil, impacting mill profitability and biomass availability.

• Probability: Low. Regulatory frameworks are constantly evolving in both Malaysia and Indonesia. While Malaysia is considered politically stable as of today, Indonesia heightened political uncertainty could elevate the risk.
• Impact: Moderate. Delays increase execution cost and timing risk.
• Mitigating factors: Established compliance processes and experience handling cross-border regulations.

Secondary Risks

8. Supply chain and vendor risk

Heavy reliance on external fabricators, component suppliers, and subcontractors exposes GENERGY to delays, quality issues, and price fluctuations especially under fixed-price, timeline-driven EPCC contracts.

• Probability: Moderate. EPCC depends heavily on vendors.
• Impact: Moderate to severe. Supplier failures can directly impact financial outcomes.
• Mitigating factors: Multiple supplier options, long-term vendor relationships, and procurement planning.

9. Credit and working capital risk

The company faces the possibility of customers may delay payments due to cash flow constraints, especially during commodity downturns or regulatory disruptions.

• Probability: Moderate. Following the trend economic downturns and slowdowns, industry-specific events would cause a domino effect.
• Impact: Moderate to severe. Cash flow strain impacts operations and short-term liquidity.
• Mitigating factors: Credit monitoring, enforce credit limits, secure payment guarantees and diversify customer base.

10. Human capital and safety risk

The business depends on skilled engineering, project management, and technical personnel. Accidents or shortages may disrupt operations or increase cost.

• Probability: Moderate. Skilled technical labour remains competitive in the region.
• Impact: Moderate to severe. Safety incidents or turnover affect productivity.
• Mitigating factors: Safety protocols, training, and competitive retention practices.

11. Taxation risk

Operating across multiple jurisdictions exposes the company to differing tax regimes, incentives, withholding taxes, and potential legislative changes. Adjustments could increase tax liabilities or reduce project profitability.

• Probability: Moderate. Multiple jurisdictions involved and evolved frequently.
• Impact: Moderate. Higher tax burden reduces net margins.
• Mitigating factors: Professional tax advisory and compliance tracking.

12. Price volatility risk

Biomass, steel, turbine components, and imported materials may fluctuate in price, affecting EPCC cost structures under fixedprice contracts. Foreign exchange volatility impact imported equipment costs and may pressure margins if not adequately hedged. Large price movements during project execution can lead to cost overruns.

• Probability: Moderate. Commodity and foreign exchange volatility is common.
• Impact: Moderate to severe. Margin compression can be significant under fixed contracts.
• Mitigating factors: Forward procurement, multiple suppliers, and engineering flexibility.

13. Uninsured and underinsured loss

Unexpected equipment damage, site incidents, or transport losses may exceed insurance coverage or fall under exclusions.

• Probability: Low. Insurance coverage is standard, but gaps exist.
• Impact: Moderate to severe. Depending on the scale of events, underinsured scenarios could impact long-run cost.
• Mitigating factors: Broad insurance coverage and risk control practices.

14. ESG risk

The company is exposed to environmental scrutiny related to biomass sourcing, emissions, and the palm oil value chain. Stricter ESG requirements from regulators, financiers, and customers may increase compliance burden or reduce demand for systems linked to less sustainable feedstock sources. Customer ESG controversies may affect project viability.

• Probability: Low. While ESG standards rising globally, the company has addressed a low-carbon, sustainable alternative practices.
• Impact: Moderate to severe. Non-compliance potentially causes project rejection or higher compliance cost, and loss of ESG-conscious clients. Reputational damage may occur.
• Mitigating factors: Cleaner biomass systems with low-carbon alternatives, adherence to environmental standards.

15. Macroeconomic risk

The business is sensitive to broader economic conditions because palm oil mills and industrial plants customers typically undertake EPCC boiler and turbine projects only during periods of strong cash flow or available financing. Economic slowdowns, high interest rates, weaker loan availability, or slowing manufacturing output in Malaysia and Indonesia may lead customers to scale down capital expenditure.

• Probability: Low. Industrial capex in both Malaysia and Indonesia moves with macro cycles.
• Impact: Moderate to severe. Weaker macro conditions reduce project tendering and order conversion.
• Mitigating factors: Multi-sector exposure, regional diversification, ongoing proposal pipeline.

16. Pandemic and epidemic risk

Health outbreaks may disrupt supply chains, workforce availability, or cross-border movement required for installation and commissioning. These disruptions can extend project timelines and increase costs.

• Probability: Very low. Post-COVID environment stabilised and policy makers are more experienced in handling such health crisis.
• Impact: Very severe. Delays and logistic issues possible which leads to financial and operational impact.
• Mitigating factors: Remote coordination capability, staggered scheduling, and diversified vendors.

17. Natural disaster

Located in tropical regions heighten the risks of being affected by floods, fires, or storms that may disrupt project sites, fabrication, or logistics. Natural disasters can also affect biomass supply chains and delay commissioning activities.

• Probability: Very low. Some locations (Shah Alam, Medan) are prone to flood during monsoon and raining season whilst heavy floods are unlikely.
• Impact: Severe. Can cause possible delays and equipment damage to complete shutdowns.
• Mitigating factors: Insurance coverage, disaster contingency planning, and site-specific planning.