Gas Malaysia Shares Up On Strong Earnings

KUALA LUMPUR, May 27 (Bernama) -- Shares of Gas Malaysia Bhd rose this morning after the natural gas seller and distributor posted a stronger net profit for the first quarter ended March 31, 2024 (1Q FY2024).

At 10.38 am, its shares edged up two sen to RM3.60, with 73,600 shares traded. 

The company, which counts MMC Corporation and Petronas Gas as substantial shareholders, reported a net profit of RM102.63 million in 1Q FY2024, up 7.9 per cent from the RM95.10 million recorded a year ago.

This was despite revenue decreasing to RM1.87 billion from RM2.44 billion in the previous year.

Kenanga Investment Bank Bhd said the 1Q FY2024 results beat its forecast due to a higher sales volume and a better gas reference price, but only met market expectations.

The investment bank has raised its FY2024 and FY2025 net profit forecasts for Gas Malaysia by nine per cent and 12 per cent, respectively.

“We like Gas Malaysia for its strong market position, being a key natural gas retailer in Malaysia; strong earnings visibility underpinned by its ability to retain customers, typically, via three-year contract; and strong free cash flow generation, anchoring a dividend yield of more than six per cent,” it said. 

Kenanga also maintained its market perform call and lifted the target price (TP) by seven per cent to RM3.55 from RM3.33 previously.

Meanwhile, MIDF Research remained positive on Gas Malaysia's continuous resiliency in financial performance.

“With the expectation of a healthy gross domestic product growth and continued domestic demand growth, we opine that the group will continue to operate efficiently and remain competitive in the business.

“The anticipation of a relatively stable Brent crude oil price in 2024 and growth in the local industrial and consumer sectors added to the optimism,” it said in a note today.

 It maintained a “buy” call for Gas Malaysia with an unchanged TP of RM3.96. 

-- BERNAMA