Gas Malaysia is achieving rating as they combined heat and power (CHP) plants, contributing minimally to earnings despite bolstering the company's ESG credentials through reduced carbon emissions, as highlighted by Kenanga Investment Bank (Kenanga), in their report today (July 15, Monday).

Kenanga has maintained GASMSIA's MARKET PERFORM rating, indicating a neutral stance on the stock's performance. They note that despite the positive environmental impact of Gas Malaysia's CHP plants, these facilities have a negligible financial impact on the company's overall earnings.

GASMSIA's CHP plants managed through its joint venture Gas Malaysia Energy Advance Sdn Bhd (GMEA), contribute 41.7MW of electricity, 165 tonnes per hour (tph) of steam, and 1,684kW of hot water. Despite their environmental benefits and energy efficiency advantages over single-generation systems, these plants have accounted for only 1.5% of GASMSIA's profits in recent fiscal years.

The investment case for GASMSIA remains stable, with a strong market position as Malaysia's leading natural gas retailer and robust earnings visibility supported by multi-year customer contracts. However, Kenanga cautions that current valuations are fair, suggesting cautious optimism among investors.