PETALING JAYA: Ranhill Utilities Bhd
is strategically positioned to benefit from Johor’s data centre (DC) build-out, with the state’s expanding digital infrastructure potentially driving an additional 700 litres to 800 million litres per day (mld) in water demand, according to TA Research.
The research house maintained its “buy” call on Ranhill and raised its target price (TP) to RM3.26 from RM2.71 following stronger-than-expected 2026 financial year (FY26) earnings and upward revisions to its forecasts.
“Notwithstanding the temporary impact of higher electricity cost in the coming quarters, Ranhill is strategically well positioned to benefit from the DC build-out in Johor,” it said in its results update.
The research house said Johor had 1.1 gigawatts (GW) of operational DC capacity as of the first half of financial year 2026 (1H26), with another 602 megawatts under construction and 2.5GW planned.
This would make Johor the second-largest DC hub in the region and the largest in terms of pipeline investment, based on Cushman & Wakefield’s 1H26 Asia Pacific Data Centre Update.
The research house estimates that 700 mld to 800 mld of incremental water demand could be generated if the planned DC investments materialise, strengthening the outlook for Ranhill SAJ, which is the group’s key earnings contributor and the state’s exclusive source-to-tap water operator.
The bullish outlook comes after Ranhill’s financial year 2026 (FY26) results beat expectations.
Core net profit stood at RM55mil in fourth quarter of FY26, bringing full-year core earnings to RM185mil, equivalent to 114% of TA Research’s forecast and 109% of consensus.
The outperformance was mainly driven by the water segment, with TA Research raising its FY27 and FY28 net profit forecasts by 14% and 17%, respectively, to reflect better-than-expected underlying margins at Ranhill SAJ.
It also introduced FY29 net profit at RM200mil, representing 4% year-on-year growth.
