$MALAKOF (5264.MY)$ Malakoff Corp (MLK) continues to shine i...
$MALAKOF (5264.MY)$ Malakoff Corp (MLK) continues to shine in the energy sector, with analysts maintaining its “buy” rating and setting a new target price of RM1.11, which is a potential increase of 16% compared to the current RM0.96. This optimistic outlook reflects Malakoff's strong position to capitalize on growing energy demand and its potential for future growth.
Analysts have raised the target price for discounted cash flow (DCF) derivatives from RM0.86 to RM1.11, which indicates an expected return of 16% for FY25 and an expected return of around 5%. The revisions are driven by Malakoff's dominant position as an experienced independent power producer (IPP), who is fully capable of benefiting from a surge in energy demand and a potential extension of power purchase agreements (PPAs) for his recently decommissioned gas-fired power plants.
In the short term, the expansion of the West Malaysia Data Center (DC) is expected to drive a significant increase in electricity consumption, exceeding the 10-year average growth rate of 2.4%. If 3-5 gigawatts of developing countries are fully operational by 2035, DC energy consumption alone is expected to achieve a compound annual growth rate (CAGR) of 1.6-2.6% between 2023 and 2035. This increase is further supported by the government's forecast of 28-36% profit margins on energy reserves between 2024 and 2030.
Malakoff's short-term prospects include the possibility of extending purchase agreements for its expiring natural gas power plants, such as the 650 MW GB3 and 350 MW Prai power plants, which may renew their contracts. The company's participation in the National Energy Transition Roadmap (NETR) enabled it to benefit from a long-term shift to gas-fired power plants as the main source of electricity for basic loads. Although the gas capacity mix is expected to fall from 42% in 2025 to 29% in 2050, gas production capacity is expected to increase by 9 gigawatts, which indicates significant future growth opportunities.
In the medium term, Malakoff aims to expand its heat capacity from 5.3 gigawatts to 10 gigawatts by 2031, and new gas production capacity is expected to increase. The company's long-term outlook remains positive, and the new target price increases the higher terminal growth rate to 1%.
Analysts have raised the target price for discounted cash flow (DCF) derivatives from RM0.86 to RM1.11, which indicates an expected return of 16% for FY25 and an expected return of around 5%. The revisions are driven by Malakoff's dominant position as an experienced independent power producer (IPP), who is fully capable of benefiting from a surge in energy demand and a potential extension of power purchase agreements (PPAs) for his recently decommissioned gas-fired power plants.
In the short term, the expansion of the West Malaysia Data Center (DC) is expected to drive a significant increase in electricity consumption, exceeding the 10-year average growth rate of 2.4%. If 3-5 gigawatts of developing countries are fully operational by 2035, DC energy consumption alone is expected to achieve a compound annual growth rate (CAGR) of 1.6-2.6% between 2023 and 2035. This increase is further supported by the government's forecast of 28-36% profit margins on energy reserves between 2024 and 2030.
Malakoff's short-term prospects include the possibility of extending purchase agreements for its expiring natural gas power plants, such as the 650 MW GB3 and 350 MW Prai power plants, which may renew their contracts. The company's participation in the National Energy Transition Roadmap (NETR) enabled it to benefit from a long-term shift to gas-fired power plants as the main source of electricity for basic loads. Although the gas capacity mix is expected to fall from 42% in 2025 to 29% in 2050, gas production capacity is expected to increase by 9 gigawatts, which indicates significant future growth opportunities.
In the medium term, Malakoff aims to expand its heat capacity from 5.3 gigawatts to 10 gigawatts by 2031, and new gas production capacity is expected to increase. The company's long-term outlook remains positive, and the new target price increases the higher terminal growth rate to 1%.
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MSing : but the retailers keep taking profit
Mandy Lim1688 : Keeps falling
101863897 : Can I start accumulating savings?!
10351974 : goodstock