PETALING JAYA: Malakoff Corp Bhd
’s growth prospects remain intact, despite the temporary drag from its recent operational issues, analysts say.
The group’s latest first quarter of financial year 2026 (1Q26) results were materially weaker year-on-year, driven by the prolonged outages at Tanjung Bin Power (TBP) unit 30 and unit 20, expiry of the Prai power purchase agreement (PPA) and the lingering impact of the October 2025 fire at the Tanjung Bin Energy (TBE) power plant.
In a note to clients, TA Research trimmed Malakoff’s financial year 2026 (FY26) net profit lower by 46% to reflect the TBP outage impact, but left FY27 to FY28 net profit forecasts unchanged as “TBP’s operational issues are expected to be addressed and contained within FY26”.
It maintained a “buy” call on the stock, but lowered its target price (TP) to RM1.26 from RM1.29 previously, following the earnings revision.
TA Research said it continues to like Malakoff for its strong capacity replenishment prospects, while valuations remain undemanding.
“The development of Malakoff’s proposed two new combined-cycle gas turbines (CCGTs) will be a priority focus for the group,” the research house further noted.
TA Research said: “We estimate that every one gigawatt (GW) greenfield CCGT capacity win could enhance annual earnings by an average of 33% and valuations by 26%.
Additionally, Malakoff also confirmed its participation in the NewGen26 greenfield gas-based generation capacity tender.
The group secured slots for up to 2.8 GW gas turbine capacity with Mitsubishi Power Ltd, which positions it well amid the global shortage and long lead times for gas turbines.
In the renewable energy space, Malakof has recently signed a 21-year PPA with Tenaga Nasional Bhd for its 22 megawatt Sungai Udang Waste-to-Energy project, which is targeted for commercial operation by 2029.
BIMB Research said in a report that it came away from Malakoff’s 1Q26 briefing with a mixed view on its operational developments and its near-term earnings outlook.
The positives for the group include TBE, which has resumed full operations on Jan 28, while repairs at TBP unit 20’s hydrogen cooler were completed and resumed on April 12.
Rectification works on the coal unloader at the Tanjung Bin jetty are progressing well and on track.
BIMB Research, meanwhile, has cut Malakoff’s FY26 earnings forecasts by 33.7%.
This is to reflect a larger estimated capacity income loss of RM267.5mil at TBP, comprising an additional RM71.5mil from the extended outage through July 2026 and a potential shortfall of RM196mil across 1Q26 to 2Q26.
“Furthermore, this is partially mitigated by our conservative assumption of a 70% insurance recovery rate on the eligible losses.
“Our FY27 to FY28 earnings forecasts are adjusted slightly lower by 0.3% and 0.9% respectively,” said the research house.
Post-revisions, BIMB Research maintained a “hold” call with a lower TP of 81 sen.
In the near term, it expects investor focus will likely stay on execution against TBP’s unit 30 repair timeline, particularly the progress of rotor rewinding works in Germany and the risk of any further delays before the unit is brought back online.
