PETALING JAYA: RHB Research believes the National Non-Revenue Water Programme, which could be implemented from 2025 to 2030 with a RM2.5bil allocation, will be a catalyst for Ranhill Utilities Bhd
.
“Ranhill may benefit from this via its subsidiary Ranhill Technologies (under the consultancy and services arm), which has clinched water projects beyond Johor – namely the RM61.5mil job to replace old pipes in Kelantan covering a total length of 103km, which was secured in March 2022,” it said in a note.
The research house said for the sixth-quarter results for financial year 2025 (FY25), Ranhill has not secured new jobs under its services arm.
“Although Ranhill recorded a loss, we view our estimates for FY26 and FY27 to have already well imputed the recent water tariff hike.
“We envision Johor’s water demand to be strong in the coming years, backed by industrial investments like data centres (DCs) and manufacturing plants that could be part of the Johor Bahru-Singapore Special Economic Zone (SEZ),” RHB Research added.
It envisaged 300 megawatts in additional DC capacity coming online annually over the next six years.
“Our estimates indicate that DC water consumption would be roughly 8% to 15% of non-domestic water usage in the next three years,” it added.
The research house has maintained a “buy” call on the counter with a target price of RM1.70. It has also introduced FY28 projections, which pencil in 4% year-on-year water consumption growth.
Meanwhile, MBSB Research has upgraded the stock to “neutral” from “sell” previously following a revision in its target price to RM1.50 from RM1.02.
