RHB Sees Up to 30% Upside in Gas Malaysia as Crude Oil Prices Climb

RHB Research is optimistic about Gas Malaysia's prospects in the current crude oil price environment. The research house has initiated coverage on the stock with a 'buy' call and a target price of RM6.50, implying a nearly 30% upside from its current price of RM5.19.

The analysts at RHB believe that Gas Malaysia will benefit from higher gas prices, as its shipper division earns a fixed margin on the Malaysia Reference Price (MRP), which tracks Brent crude oil. They forecast MRP to increase by 26% year-on-year in 4Q and by 28% year-on-year in 2027.

The research house also points out that Gas Malaysia has received approval from the Energy Commission to build a new regasification terminal 4 (RGT4) project, which is expected to be commissioned by 2030. This project will provide a stable gas supply to new gas plants coming online in 2030 and could result in additional upside for the company.