CGS International maintains bullish view on Malakoff ahead of tenders
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.
'This will be further supported by the RM950 million mini-hydro project and the RM660 million waste-to-energy (WTE) plant, which we forecast could contribute a combined RM35 million in net profit annually.'
CGS International said 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, based on its back-of-the-envelope calculations.
Together, these projects offer strong earnings visibility, backed by long-term power purchase agreements (PPAs) and concessions.
While Malakoff's share price has rebounded from its 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.
'We also see Malakoff as a strong contender for new gas-fired plant contracts,' it said.
On May 10, 2025, the Energy Commission called for proposals for new gas-fired generation capacity in Peninsular Malaysia through competitive bidding, comprising two categories: (1) an expansion of existing plants and (2) development of new plants.
Malakoff has submitted bids to extend the PPAs for three of its gas plants, GB3 640 megawatts (MW), 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. — BERNAMA
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