PETALING JAYA: Utilities-related stocks are expected to continue doing well as their businesses benefit from higher energy demand supported by data centres (DCs), a rise in electricity tariffs in Peninsular Malaysia and the ongoing expansion of renewable energy (RE) infrastructure.
Analysts from Kenanga Research and UOB Kay Hian (UOBKH) Research have maintained an “overweight” stance on these stocks, with Tenaga Nasional Bhd
(TNB) a major beneficiary. Kenanga Research has an “outperform” call on the stock with a RM17 target price (TP).
“TNB remains our top pick, as the long-term primary beneficiary of the DC boom, given its exposure to demand growth, the transmission and distribution capex upcycle, and new capacity buildouts,” Kenanga Research said.
TNB expects electricity demand growth of 4.5% to 5.5% for its financial year ending Dec 31, 2026 (FY26), with demand growth rising 7% in the first quarter ended March 31, 2026 (1Q26).
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