Gas Malaysia Revisited Amid Brent Crude Price Volatility

Gas Malaysia Bhd (KL:GASMSIA) is once again in focus as Brent crude oil prices experience volatility due to ongoing conflicts in the Middle East, which began in March. According to Maybank Investment Bank (Maybank IB), Gas Malaysia's gas costs are directly tied to Brent prices with a lag of around eight months.

The natural gas supplier's earnings will reflect the price rally that started in March 2026, and this impact is expected to be seen in its fourth-quarter financials for 2026. Maybank IB predicts gas costs for the second quarter of 2026 (2Q2026) to fall by 17% year-on-year (y-o-y) and 3% quarter-on-quarter.

The house also forecasts a 2% drop in average domestic gas prices for 2026, with prices bottoming out around 2Q-3Q of that year. Maybank IB maintained its 'hold' rating on Gas Malaysia's stock but lowered its target price to RM5.00 from RM5.50 per share based on the assumption of lower gas prices.

The analyst noted that further upside for Gas Malaysia is contingent upon domestic gas prices staying higher for longer. Additionally, Maybank IB estimates that every US$10 per barrel increase in crude oil price would raise its FY2027 net profit by 9% and target price by 50 sen per share.