Gas Malaysia Gains Attention Amid Brent Crude Price Volatility

Gas Malaysia Bhd (KL:GASMSIA) is back in focus as Brent crude oil price volatility resurfaces, according to Maybank Investment Bank (Maybank IB). The company's gas costs track Brent prices with a lag of approximately eight months.

The natural gas supplier's earnings will likely benefit from the crude oil price rally in March 2026, which began with back-and-forth conflicts in the Middle East. Maybank IB notes that the earnings uplift would manifest in Gas Malaysia's 4Q2026 financials.

The house predicts a 17% year-on-year (y-o-y) and 3% quarter-on-quarter drop in gas costs for the second quarter of 2026 (2Q2026). However, it expects average domestic gas prices to fall by only 2% y-o-y, with prices bottoming out around 2Q-3Q of 2026.

Maybank IB maintained its 'hold' rating on Gas Malaysia's stock and lowered its discounted cash flow-based target price (TP) to RM5.00 from RM5.50 per share on the assumption of lower gas prices. The house noted that further upside is contingent on domestic gas prices staying higher for longer.

Maybank IB predicts an 80% dividend payout ratio for Gas Malaysia's forecasted financial year ending Dec 31, 2026, implying a yield of an estimated 4.5%. This aligns with the company's traditional minimum 75% dividend payout policy since its original listing in 2012.