KUALA LUMPUR (Sept 7): RHB Research sees project rollouts to pick up in the renewable energy sector, with more Corporate Renewable Energy Supply Scheme (CRESS) announcements expected in the coming months.

"Following the finalisation of access charges, we expect more Corporate Renewable Energy Supply Scheme (CRESS) project news flow this year," it said in a note on Monday.

RHB noted that Tenaga Nasional Bhd (KL:TENAGA) recently inked a deal to potentially supply up to 1.5GW of electricity to DayOne data centres.

The house projects these agreements could lift the group’s earnings by as much as 8%, while maintaining its "buy" call with a target price of RM16.50.

Earlier this year, Tenaga Nasional had also signed a 21-year agreement under the CRESS to supply electricity to the DayOne Selangor facility from its 595MWac Hybrid Hydro Floating Solar (HHFS) project in Kenyir, Terengganu.

The expansion of data centres has driven electricity demand, with Tenaga Nasional recording a 5% earnings growth in the first half (1H2026), supported by a 9% increase in unit sales from data centre demand and further boosted by a narrower effective tax rate.

Meanwhile, RHB said the Large Scale Solar 6 (LSS6) programme remains a key catalyst for solar players.

"With the (LSS6) tender closing in October 2026, we expect the earliest awards to be announced in 1HCY2027," said the house in a note on Monday.

RHB expects Solarvest Holdings Bhd (KL:SLVEST) and Samaiden Group Bhd (KL:SAMAIDEN) to be the key beneficiaries of the LSS6, underpinned by their established track records across previous programmes.

With total project capital expenditure (capex) of LSS6 potentially reaching RM13 billion to RM15 billion, RHB assumes Solarvest could secure a 20%–30% market share, while Samaiden may capture 10%–15%.

Meanwhile, the house expects solar adoption acceleration on the back of higher electricity bills owing to the Middle East conflict.

It noted that for the month of September, the government implemented an Automatic Fuel Adjustment (AFA) surcharge of 3.67 sen per kWh, which resulted in a c.12% average monthly bill increase as compared to pre-war levels (2.77sen per kWh rebate).

“We believe the higher tariffs will drive solar power adoption, benefitting the solar EPCC players,” RHB said.

Overall, RHB stayed "overweight" on the Malaysian energy and utilities companies after first-half earnings under its coverage met expectations.

In terms of outcomes versus the research house’s forecasts, of the 10 companies under its coverage, six reported in line with expectations, three missed, and one outperformed.

Another beneficiary of data centre expansion was YTL Power International Bhd (KL:YTLPOWR), whose earnings came in line with RHB’s estimates but beat consensus expectations. 

YTL Corp data centre segment alone contributed RM244 million, or 35% of profit before tax, in the latest quarter (4QFY2026), as this was driven by the full utilisation of its 150MW operating capacity.

Looking ahead, RHB expects data centre contributions to further accelerate earnings growth for YTL Power, which is on track to expand another 200 megawatts (MW) of capacity by June 2027.

The company has also recently acquired a 145-acre site in Sedenak to develop another one gigawatt (GW) of data centre capacity.

Meanwhile, Malakoff Corp Bhd’s (KL:MALAKOF) 2QFY2026 results missed expectations due to a higher-than-expected effective tax rate. As a result, RHB slashed its FY2026F earnings per share (EPS) forecast by 45%. 

However, the research house remains optimistic on Malakoff’s recovery as operations at the Tanjung Bin Power plant in Johor resumed last month.

In contrast, Gas Malaysia Bhd (KL:GASMSIA) and Petronas Gas Bhd (KL:PETGAS) delivered results in line with expectations, RHB noted.

Separately, the Energy Commission (EC) is expected to announce the winners of the New Generation Power Plant 2026 (NEWGEN26) tender by year-end, following its call earlier this year for bids to build new gas-fired plants slated for commissioning between 2029 and 2031. The tender, which closed in July, attracted at least four submissions with a combined capacity of 3.5GW.

RHB assumes YTL Power, with a target price of RM7.00, will secure the projects, projecting potential upside of about 4% to its valuation, while maintaining a "buy" call on the stock.

Meanwhile, Solarvest and Samaiden were also rated “buy,” with target prices of RM2.42 and RM3.64, respectively.