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BUSINESS • 24/07/2026 01:15 PM

RHB IB Initiates ‘Buy’ Call For Gas Malaysia On MRP, RGT4 Prospects

KUALA LUMPUR, July 23 (Bernama) -- RHB Investment Bank Bhd (RHB IB) has initiated coverage on Gas Malaysia Bhd (GMB) with a 'buy' recommendation and a target price (TP) of RM6.50 on expectations of higher gas prices and growth prospects from its planned Regasification Terminal 4 (RGT4) project.

In its report today, the investment bank said GMB stands to benefit from higher Malaysia Reference Prices (MRP), which track Brent crude oil prices.

Following the oil price spike in the second quarter (2Q) due to the West Asia conflict, RHB expects the MRP to increase 26 per cent year-on-year (y-o-y) in 4Q, given the nine-month lag to Brent oil price movement. 

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"We expect a stronger impact in 2027 – and forecast MRP to increase 28 per cent y-o-y -- to reflect the 21 per cent increase in Brent oil price in 2026," it said. 

RHB IB noted that the company's planned RGT4 project in Yan, Kedah is crucial to ensure a stable gas supply to new gas plants coming online in 2030, adding that it has factored in a 49 sen-per-share contribution from the proposed project to its valuation of GMB. 

The investment bank highlighted that as the sole operator of the Natural Gas Distribution System (NGDS) network, GMB had received a 20 per cent tariff for Regulatory Period 3 (RP3 – 2026-2028), which is expected to provide a stable earnings base for its regulated business. 

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At the same time, it said that there is scope for a further 10 per cent upside to GMB’s share target price if additional regasification capacity from RGT4 is allocated to GMB's gas shipping division.

It forecasts GMB's earnings to grow four per cent in financial year 2026 (FY2026) before accelerating to 16 per cent in FY2027 on higher MRP and stronger gas demand, translating into a compounded annual earnings growth (CAGR) of six per cent over FY2025-FY2028.

RHB IB added that downside risks to its recommendation include lower-than-expected MRP, competition among gas shippers and delays in commissioning RGT4.

-- BERNAMA

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