KUALA LUMPUR (Feb 25): PETRONAS Gas Bhd (KL:PETGAS) tested its lowest in more than two months after the state-owned pipeline operator reported an unexpectedly weak quarter.
The stock fell as much as 5.8% or RM1.08 to RM17.52 — its lowest since Dec 18, 2025. PETRONAS Gas ended Wednesday off lows at RM18.48, just 12 sen or 0.65% lower than the previous day’s close. The company is valued at RM36.6 billion based on its last price.
Kenanga Investment Bank Bhd said in a note PETRONAS Gas’ full-year core net profit of RM1.69 billion came in 9% and 7% below its own and consensus estimates respectively, dragged mainly by weaker gas transportation earnings due to intensified preventive maintenance activities in the fourth quarter ended Dec 31, 2025 (4QFY2025).
That said, Kenanga views the earnings shortfall as a one-off, noting that PETRONAS Gas’ regulated business model continues to underpin earnings visibility.
In a note to clients, Kenanga said more than 90% of the group's earnings are safeguarded under the Incentive-Based Regulation framework, while the Regulatory Period 3 (RP3) reinforces stability and supports a decent dividend yield of about 4%.
Hong Leong Investment Bank meanwhile expects earnings to remain stable, as the group’s key business segments are largely protected under the Regulatory Asset Base structure, with the utilities segment partially cushioned by the Imbalance Cost Pass-Through mechanism.
“In addition, PETRONAS Gas is poised to benefit from a stronger ringgit against the US dollar, as portions of its capital expenditure, operating costs and lease payments are denominated in the latter currency,” it said.
Meanwhile, CIMB Securities expects PETRONAS Gas to provide further clarity on the earnings impact from revised gas transportation and regasification tariffs under the RP3.
In December, the group announced that the Peninsular Gas Utilisation transportation base tariff for the RP3 was raised by 12.5% compared with the RP2 (2023-2025).
However, it remains unclear whether the higher tariffs will merely offset rising costs or translate into incremental earnings growth, CIMB noted.
Year to date, PETRONAS Gas shares are down more than 3%. The stock currently has 11 ‘hold’ calls and four ‘buy’ calls from research houses, according to Bloomberg data, with a 12-month target price of RM18.98, implying a return potential of 4.7%.