Kuala lumpur: CGS International Securities Malaysia Sdn Bhd remains positive on Malakoff Corporation Bhd, citing its strong position to secure upcoming Energy Commission tenders amid rising power demand and the urgent need to ensure supply stability and reserve margins.
According to BERNAMA News Agency, the brokerage stated that its outlook is underpinned by Malakoff’s established track record in thermal plant development and operations, supported by its ready-to-deploy plans, sites, and assets. “We estimate the plant extensions could generate at least RM40 million in annual net profit from 2026,” it said in a research note.
The report further highlighted that the RM950 million mini-hydro project and the RM660 million waste-to-energy (WTE) plant are anticipated to contribute a combined RM35 million in net profit annually. CGS International also mentioned that a potential win for a 1.4 gigawatt greenfield gas plant could add at least RM200 million in recurring annual net profit and RM1 billion in equity value, equivalent to 20 sen per share.
The projects are expected to offer strong earnings visibility, backed by long-term power purchase agreements (PPAs) and concessions. While Malakoff’s share price has rebounded from recent lows, the firm sees further upside potential, driven by a pipeline of unpriced assets, including the mini-hydro and WTE plants, its stake in E-Idaman, and potential PPA extensions for the GB3, Prai Power, and Segari plants.
Additionally, CGS International sees Malakoff as a strong contender for new gas-fired plant contracts. On May 10, 2025, the Energy Commission called for proposals for new gas-fired generation capacity in Peninsular Malaysia through competitive bidding. This includes two categories: the expansion of existing plants and the development of new plants.
Malakoff has submitted bids to extend the PPAs for three of its gas plants, GB3 (640 megawatts), Prai Power (350 MW), and Segari (1,303 MW), through to 2029, and plans to participate in bids under Category 2. CGS International maintained its ‘Add’ recommendation on Malakoff with a target price of RM1.20 per share, based on a conservative assumption of just one joint venture win.