PETALING JAYA: Gas Malaysia Bhd
will likely see its first-half net profit fall 10% year-on-year on the backdrop of a weaker second quarter of 2026 (2Q26).
UOB Kay Hian (UOBKH) Research said the cause of this included lower natural gas (NG) prices due to the sharp spike in oil prices.
UOBKH Research estimated that NG prices will hit between RM45 and RM50 per million British thermal units (mbtu) versus the estimated price of NG of RM34 per mbtu for the first nine months of this year.
“The Middle East conflict will lead to higher NG prices from 4Q26 onwards. This suggests a strong finish for 2026 and spillover of higher NG prices into 2027.
“We estimate that a 1% change in NG prices can swing Gas Malaysia’s net profit by 4%,” it added.
UOBKH Research said Gas Malaysia derives 50% to 60% of its profit from Gas Malaysia Energy and Services Sdn Bhd, and that the higher NG prices will translate into larger profitability overall.
In the meantime, other reasons impacting earnings for 2Q26 are higher staff and administrative costs, and marginally lower returns on regulated assets.
Separately, UOBKH Research pointed out that Gas Malaysia’s liquefied natural gas regasification terminal (RGT) project in Yan, Kedah, will likely house an offshore floating storage and regasification unit with an initial planned regasification capacity of four to six million tonnes per annum (mtpa).
“At this juncture, we understand that plans are rather fluid. While the initial plan was to build a six mtpa RGT project, there is a chance that the project will be scaled down to four mtpa with a focus on one offtaker.
“The expected commercial operational date is slated for mid-2030, instead of the initial 2029 timeline,” the research house said. The project is forecast to yield a positive equity value of RM750mil.
With that, UOBKH Research will maintain a “hold” call on the stock with a target price of RM6, factoring in a blue-sky scenario 58 sen per share equity enhancement for the group’s RGT project in Yan.
Moreover, UOBKH Research said it will cut its net profit estimation by 7% to reflect start-up costs for the Yan project.
