PETALING JAYA: Gas Malaysia Bhd
will likely see an earnings recovery next year as higher natural gas prices and a potential shake-up of the country’s gas supply market open up new growth opportunities for the company.
UOB Kay Hian (UOBKH) Research – which has upgraded the stock to a “buy” – said the company could also benefit from Malaysia’s energy transition, with more than eight gigawatts (GW) of new gas-fired power generation capacity expected to be built by 2031.
The potential liberalisation of the power sector natural gas supply chain would also allow power plants to secure gas independently from shippers such as Gas Malaysia.
Gas Malaysia is the largest natural gas shipper in Peninsular Malaysia, with a market share of 83% as of June 2026.
UOBKH Research noted that the company may benefit from off-grid co-generation opportunities as data centre operators seek to secure their own power supply.
Unknown to many, Gas Malaysia has experience operating a co-generation plant in Penang and could position itself to tap this emerging market.
The research house said that natural gas is projected to account for 56% of Malaysia’s total primary energy supply by 2050, up from 47% in the first half of financial year 2026.
Meanwhile, the group’s Yan regasification terminal (RGT Yan) in Kedah – with a planned capacity of 500 million standard cu ft per day (mmscfd) – is expected to begin commercial operations in the first quarter of 2031.
UOBKH Research estimates that up to 90% of its capacity may have been secured, with the project potentially lifting earnings before interest, taxes, depreciation and amortisation (Ebitda) by 13% and contributing an estimated equity value of RM0.58 per share.
According to the research house, the Energy Commission estimates that the eight GW of new gas-fired power generation capacity needed by 2031 would require nearly 1,600 mmscfd of natural gas. This is almost double the power sector’s current gas consumption of 800 to 1,000 mmscfd.
RGT Yan, with a capacity of 500 mmscfd, is estimated to cost approximately US$250mil to US$300mil.
Developed alongside Tokyo Gas Co and VTTI BV – with each holding a 15% stake – the project could lift Gas Malaysia’s Ebitda by 15%, assuming a 50% stake in the joint venture, said the research firm.
Besides upgrading the stock to a “buy,” the research house raised its dividend discount model-based target price to RM7 from a higher long-term growth assumption of 3%, up from 2%.
This incorporated the RM0.58 per share in equity value from RGT Yan.
At the time of writing, shares of Gas Malaysia traded at RM5.45, translating into a market capitalisation of RM7bil.
