RHB Sees Nearly 30% Upside for Gas Malaysia as Oil Prices Soar
RHB Research has initiated coverage on Gas Malaysia Bhd (KL:GASMSIA) with a 'buy' call, citing its potential to benefit from higher oil prices. The research house pegs a nearly 30% upside to the current price of RM5.19.
The analysts at RHB believe that Gas Malaysia will benefit from increased crude oil prices due to its shipper division's fixed margin on Malaysia Reference Price (MRP). They forecast MRP to increase by 26% year-on-year in 4Q, and by 28% in 2027.
The research house also notes that the company has received approval to build a new regasification terminal 4 (RGT4) project, which will provide stable gas supply to new gas plants coming online in 2030. The RGT4 project is expected to contribute significantly to Gas Malaysia's earnings.
RHB initiates coverage on the stock with a sum-of-parts (SOP)-based target price of RM6.50, implying a more than 25% upside from its current price.