PETALING JAYA: The prospects for Malakoff Corp Bhd
appear to improve this year as coal operations stabilise and new gas-fired power plant opportunities emerge to strengthen earnings visibility over the medium term, according to RHB Research.
The independent power producer is also positioning itself for upcoming generation projects that could support its transition from coal to gas-based capacity.
The developments may provide meaningful upside if new contracts materialise, according to the research house.
RHB Research, which recently hosted a small group meeting with Malakoff and investors, maintained its “buy” call on the company, with a new target price of 90 sen, pegged to 20 times financial year 2026 (FY26) price-to-earnings, which represented its three-year average.
The research house trimmed the target price from 93 sen but highlighted that the stock offers around a 5% FY26 forecast dividend yield.
“We expect coal plant operations to normalise this year, and see upside from new gas plant projects with four turbines reserved,” it said.
Coal supply to the group’s plants has already resumed after earlier disruptions.
Following clearance works at the jetty serving its Tanjung Bin facilities, management confirmed that shipments restarted on March 8.
The company is on track to gradually rebuild its coal inventory to the 822,000 tonnes required for operations at Tanjung Bin Energy and Tanjung Bin Power.
During the disruption, Malakoff arranged alternative delivery routes using truck transportation to keep the coal-fired plants running.
However, an operational issue remained at Tanjung Bin Power.
A faulty turbine rotor has been sent to Germany for repairs, with delivery expected in the second quarter.
As a result, RHB Research factored in lower capacity payments from the plant for about three months after its unplanned outage rate exceeded 6%, with the reset only scheduled for 2027.
Beyond resolving current operational challenges, Malakoff is also preparing for expansion in gas-fired generation.
The company had reserved four turbines as part of plans to build two new 1.4GW gas-fired plants in Port Dickson and Segari, the research house noted.
Given the government’s plan to add 5WG to 6GW of new gas-fired capacity by 2030, RHB Research said Malakoff could be well positioned to secure project awards as early as this year.
It noted that the company’s management is also considering participation in the Energy Commission’s NewGen2026 tender, which targets new gas plants scheduled for commissioning between 2029 and 2031.
The tender closes in July, with winning bids expected to be announced by year-end.
“We estimate a potential 43% upside to our target price if Malakoff secures a bid to build a new 1.4GW plant,” RHB Research said.
Such projects could also help replace the group’s 2.1GW Tanjung Bin Power coal-fired plant, which is slated for decommissioning in 2031.
