RHB Research maintained its OVERWEIGHT call on Malaysia’s energy sector after first-half 2026 earnings broadly met expectations, with rapidly expanding data centre capacity emerging as a major growth driver for Tenaga Nasional Bhd (TNB) and YTL Power International Bhd (YTLP).
Of the 10 energy companies under RHB’s coverage, one exceeded expectations, six delivered results in line with forecasts and three fell short.
Among the larger-capitalisation companies, results were largely within expectations, with electricity demand from data centres providing a particularly strong boost to TNB.
TNB’s recurring earnings increased 5% year-on-year in 1H26, supported by a 9% increase in electricity unit sales. Commercial-sector electricity sales, which capture demand from data centres, grew 14% year-on-year.
The utility’s effective tax rate also declined to 28% in 2Q26, with management maintaining its target of achieving a full-year effective tax rate of between 23% and 24%.
YTL Power Data Centre Earnings Surge
RHB also highlighted the growing contribution from YTL Power’s data centre business, which has become an increasingly important earnings driver for the group.
YTLP’s results were in line with RHB’s forecasts but exceeded consensus expectations.
Its data centre segment contributed RM244 million in pre-tax profit in 4QFY26 ended June, equivalent to about 35% of group pre-tax profit. This was more than four times the RM59 million contribution recorded in the preceding quarter.
The increase came as YTLP achieved full utilisation of its existing 150MW operating data centre capacity.
RHB expects the contribution to accelerate further as the company is on track to complete another 200MW of capacity by June 2027.
YTLP has also acquired 145 acres of land in Sedenak, Johor, for the development of an additional 1GW of data centre capacity, providing a substantial longer-term growth pipeline.
The research house named YTLP as its top sector pick, citing the earnings upside from its expanding data centre footprint.
Malakoff Misses Expectations
Malakoff Corporation Bhd’s earnings, however, fell below RHB’s expectations due to a higher-than-anticipated effective tax rate during 2Q26.
Following the results, RHB cut its FY26 earnings-per-share forecast for Malakoff by 45%.
Despite the downgrade, the research house remains positive on the company’s operational recovery after the rotor at its Tanjung Bin Power plant resumed operations last month.
Gas Malaysia Bhd and Petronas Gas Bhd, meanwhile, delivered earnings that were within expectations.
Renewable Energy Results Mixed
Performance among renewable energy companies was more varied.
Samaiden Group Bhd exceeded RHB’s forecasts after delivering stronger-than-expected margins for FY26 ended June. The research house subsequently raised its FY27 and FY28 earnings forecasts for Samaiden by 23% and 8% respectively, reflecting higher margin assumptions.
Solarvest Holdings Bhd’s results were in line with expectations.
BM Greentech Bhd, however, missed forecasts in 1QFY27 due to weaker-than-expected margins from both its bio-energy and water-treatment businesses.
RHB made no changes to its earnings forecasts or recommendation for BM Greentech for now, pending an analyst briefing scheduled for Sept 24.
Data Centres, NETR And Solar Tenders Support Outlook
RHB said the structural growth in electricity consumption from data centres remains an important theme for the sector, benefiting both electricity generators and infrastructure providers.
Besides YTLP, the research house remains positive on TNB as a key beneficiary of Malaysia’s National Energy Transition Roadmap (NETR), with its regulated business framework providing a relatively stable earnings base.
RHB also favours Samaiden and Solarvest as potential beneficiaries of upcoming solar project tenders.
With data centre expansion driving electricity consumption and Malaysia’s energy transition generating new investment opportunities across the power and renewable energy value chains, RHB maintained its OVERWEIGHT recommendation on the sector.
