KUALA LUMPUR (Feb 26): Malakoff Corporation Bhd's (KL:MALAKOF) power plant woes could hurt its earnings more than expected this year, analysts said, following its first quarterly loss in two years.
The group's medium- to long-term prospects nonetheless remain positive on the back of project extensions, a new waste-to-energy plant expected this year and other new power plants being negotiated, they said.
BIMB Securities said in a note that while the Tanjung Bin Energy (TBE) plant resumed operations in late January 2026, uncertainty lingers over the December coal jetty collapse. The research house maintained its 'hold' rating with a target price of 74 sen, implying a downside of almost 11%.
Similarly, Maybank Investment Bank flagged sharper-than-expected losses from TBE’s extended outage, revising its forecasts lower for the financial year ending Dec 31, 2026 (FY2026) and cutting its target price to 80 sen from its previous target price of 87 sen while maintaining its ‘hold’ rating.
There are now five ‘buy’, four ‘hold’, and two ‘sell’ calls on Malakoff. The consensus target price is now 94 sen, based on the average of 11 research houses tracked by Bloomberg.
Malakoff's three-year extensions totalling 2.1GW capacity recently won could result in "up to 17% earnings enhancement", said TA Securities.
It called the fourth quarter ended Dec 31, 2025 (4QFY2025) a trough and projecting recovery from 1QFY2026 onwards, supported by insurance claims and the reset of TBE’s unplanned outage rate. It kept its ‘buy’ call with a target price of RM1.29.
Malakoff slipped into a core net loss of roughly RM6 million in 4QFY2025, weighed by the October fire at TBE’s flue gas desulphurisation facility and a steam turbine failure at Tanjung Bin Power.
Therefore, according to various analysts, the full-year core net profit fell sharply to roughly RM96 million to RM146 million, down roughly 43-64% year-on-year, with revenue declining by nearly 20%, close to RM7.2 billion.
Beyond this, the house also noted that Malakoff is also negotiating with regulators on two new power projects in Negeri Sembilan and Kedah with a combined potential of 2.8GW, which could significantly lift valuations if secured.
TA Securities further noted that the group is also in the midst of developing a waste-to-energy plant in Sungai Udang, Melaka, with a waste handling capacity of 1,056 metric ton per day and 22 megawatt power generation capacity, backed by a 34-year concession and expected to begin construction in 2QFY2026 once the power purchase agreement with Tenaga Nasional Bhd (KL:TENAGA) is finalised.
Public Investment Bank remained cautious, maintaining its ‘underperform’ rating with a target price of 78 sen, implying a downside of 6%, warning that execution risks around asset restoration continue to cloud near-term visibility.
CGS International, however, maintained its ‘add’ rating with a target price of RM1.20, citing improving earnings prospects from gas plant extensions and potential new assets.