Gas Malaysia Bhd: Brent Crude Volatility Sparks Attention Again
Kuala Lumpur-based Gas Malaysia Bhd (KL:GASMSIA) is getting attention again due to rising Brent crude oil price volatility, according to Maybank Investment Bank (Maybank IB). The natural gas supplier's costs track Brent prices with an approximately eight-month lag.
The earnings boost from the March 2026 crude oil price rally will be seen in Gas Malaysia's fourth quarter 2026 financials, said Maybank IB. The house predicts a 17% year-on-year drop in gas costs for the second quarter of 2026 and a 3% quarter-on-quarter decline.
However, average domestic gas prices are expected to fall by only 2% year-on-year, with prices bottoming out around the second or third quarter of 2026. Maybank IB maintained its 'hold' rating on Gas Malaysia's stock but lowered its discounted cash flow-based target price (TP) to RM5.00 from RM5.50 per share.
The house noted that further upside is contingent on domestic gas prices remaining higher for longer. Every US$10 per barrel increase in crude oil price would raise the FY2027 net profit by 9% and the TP by 50 sen per share, said Maybank IB.