Broker Name: CGS International

Date of Report: December 11, 2025

Excerpt from CGS International report.

• Report Summary:
• Malaysia’s utilities sector is entering a major investment cycle, shifting from a solar-led energy transition to a broad-based energy expansion, with accelerating demand driven by data centres (DCs), industrial FDI, and energy-intensive manufacturing.
• Policy execution under the National Energy Transition Roadmap (NETR) has catalysed new frameworks, enabling significant rollout of generation, grid, gas, storage, and green technology projects, with RM150bn+ in pipeline investments and a focus on execution from 2026 onwards.
• Early-cycle beneficiaries (solar EPCC, grid suppliers) have rallied strongly on immediate project wins, while large-cap utilities (Tenaga, Malakoff) are poised for the next wave of upside as project awards and regulated asset base expansions materialise.
• The sector is supported by strong policy visibility (gas market reforms, carbon tax, energy efficiency mandates), growing grid investment (doubling historical capex), and rising electricity demand (estimated ~7% CAGR 2024-2030, 3x historical rate).
• Malaysia is building out a diversified energy mix, including new CCGT plants, battery storage (BESS), carbon capture (CCUS), and exploring nuclear as a long-term option, with the addressable commercial solar market potentially reaching 27-28GW by 2030.
• Green tariffs (CRESS) are expanding market opportunities, making renewable energy cost-competitive for commercial users and DCs, with significant EPCC opportunities for both quota-based and market-driven solar projects.
• Energy efficiency is becoming a regulated, investible growth lever, while carbon taxes are expected to have a modest impact on tariffs due to pass-through mechanisms.
• Valuations for large-cap utilities remain undemanding, with sector Overweight rating; top picks are Tenaga and Malakoff for their exposure to regulated earnings and growth from new capacity.
• The opportunity pool is broadening beyond utilities to include solar contractors, grid suppliers, gas and storage infrastructure players, and energy efficiency providers.
• ESG momentum and government policies are set to drive sustainable, long-term growth in Malaysia’s power sector, with significant improvements in disclosures and targets among key listed players.

Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgsi.com