PETALING JAYA: CGS International (CGSI) Research believes Malakoff Corp Bhd
is well-positioned to secure new gas-fired power projects.
This is after the power producer announced on Oct 13 that it had entered into a reservation agreement (RA) with Mitsubishi Power Ltd for two M701JAC gas turbines.
The equipment will power a planned 1,400 megawatts combined-cycle gas turbine (CCGT) plant in southern Peninsular Malaysia, while the agreement also grants Malakoff the option to reserve another two turbines for a similar project in the north.
“We view this development positively, as the RA allows Malakoff to secure critical gas turbine equipment in advance, mitigating supply chain and scheduling risks while improving its competitive positioning for upcoming project awards in Malaysia,” the research house said.
It added that such forward planning is vital as “Malaysia faces growing urgency to add generation capacity amid surging demand from data centres.”
Global supply constraints have also made it harder for developers to source turbines on time.
“By securing early reservations, Malakoff effectively addresses this bottleneck, ensuring access to scarce equipment and reinforcing its readiness for timely execution once projects are confirmed,” CGSI Research noted.
Malakoff’s potential CCGT pipeline totals about 4.2 gigawatts (GW), including two projects under initial letters of intent pending conversion into firm awards and one new bid submitted in September under the open tender.
The company currently operates 5.3GW of domestic generation capacity, split between 54% coal and 46% gas.
CGSI Research estimated that a 1.4GW greenfield CCGT project could contribute at least RM200mil in recurring annual net profit, signalling meaningful upside if Malakoff secures new projects.
The research house reiterated its “add” call on the stock.
“Malakoff’s share price has performed well over the past three months, yet we see further upside potential, supported by a pipeline of unpriced new secured assets and potential extensions of three expired or expiring power plants.”
It highlighted attractive valuations at 5.6 times 2026 enterprise value to its earnings before interest, taxes, depreciation and amortisation, near the low end of historical averages, while citing catalysts such as new gas-fired plant awards, renewable energy expansion and concession extensions.
However, CGSI Research cautioned that “near-term earnings risks persist following the recent fire at its coal plant, pending clarity on the duration of the outage” alongside the possibility of negative fuel margins and unplanned outages.
