Latest news with #Ranhill
New Straits Times
04-08-2025
- Business
- New Straits Times
Ranhill Utilities target price raised to RM1.70 on tariff hike, data centre prospects
KUALA LUMPUR: RHB Research has reaffirmed its BUY recommendation on Ranhill Utilities Bhd, raising its target price (TP) to RM1.70 from RM1.37, implying a 26 per cent upside. The upgrade reflects improved earnings visibility following a water tariff hike in Johor and strong growth momentum from the state's booming data centre sector, the firm said. RHB added that, backed by favourable regulatory changes, structural tailwinds in Johor's digital infrastructure push, and its strong execution track record, Ranhill Utilities remains a compelling long-term infrastructure player. In a recent note, the research house said Ranhill stands to benefit from a combination of factors—new tariffs, rising demand from data centres, and the government's planned infrastructure push—positioning the group for multi-year growth. It noted that the stock offers a modest 1 per cent dividend yield for the financial year ending June 2026 (FY26), with further upside potential from future contract wins. The revision follows the announcement of a new water tariff structure by Ranhill SAJ (RSAJ)—Ranhill's 80 per cent-owned water subsidiary—effective 1 August 2025. The revision includes a new tariff category for data centres, aimed at supporting key infrastructure projects such as the Layang 2 Phase 2 (160 million litres per day—MLD), Semanggar (50 MLD), and Semanggar 3 (120 MLD). RSAJ's tariff adjustments cover all user categories. For residential Band 3 and domestic bulk users, water rates are up by 8–11 per cent, or 20 to 35 sen per cubic metre (cu m). Non-domestic users will see increases of 3 to 51 per cent, with Band 2 users facing the steepest jump—from RM3.50/cu m to RM5.30/cu m. A new pricing band for data centres has also been introduced at RM5.33/cu m, slightly higher than non-domestic Band 2 rates but still below Singapore's equivalent industrial rate of about RM5.80/cu m (inclusive of waterborne tax). RHB Research estimates the revised tariffs will raise RSAJ's blended average tariff from RM2.56 to RM2.88/cu m in FY26F, reflecting an 11-month contribution. A full-year impact in FY27 is expected to lift tariffs further to RM3.14/cu m. These changes prompted upward revisions to Ranhill's earnings forecasts, with FY26 and FY27 net profit estimates raised by 15.3 per cent and 23.4 per cent, respectively. Additionally, the research house has revised its long-term water consumption growth assumption to 4 per cent from 3.5 per cent beginning in FY30, driven by growing demand from data centres and the Johor-Singapore Special Economic Zone (JS-SEZ). According to DC Byte's July 2025 Market Spotlight Report, Johor currently has 487 MW of live data centre IT capacity, with another 324 MW under construction and 1,473 MW in committed capacity. RHB projects 300 MW of new data centre capacity to go online annually for the next six years. As a result, data centres are expected to account for 8–15 per cent of RSAJ's non-domestic water consumption over the next three years. Apart from tariff-linked gains, Ranhill is also expected to benefit from the government's National Non-Revenue Water (NRW) Programme, which has an RM2.5 billion allocation under the 12th Malaysia Plan (2025–2030). Ranhill Technologies, the group's consultancy arm, previously secured a RM61.5 million contract in Kelantan in March 2022 to replace 103 km of ageing pipes and is well-positioned for similar projects under the NRW initiative. Although no new jobs have been secured by the services division in FY24 so far, RHB believes the nationwide rollout of NRW-related works could reignite the group's project pipeline. RHB's revised TP of RM1.70 is based on a sum-of-parts (SOP) valuation and includes a 4 per cent ESG premium, reflecting Ranhill's alignment with sustainability objectives. However, the research house cautions that a slowdown in water consumption, particularly from industrial or residential segments, remains a key downside risk to its forecasts.
The Star
22-05-2025
- Business
- The Star
Water tariff revision potential catalyst for Ranhill
PETALING JAYA: The market outlook for Ranhill Utilities Bhd remains mixed, as the company's recent results again missed most brokerage firms and consensus expectations. MIDF Research in a report said it maintained a 'sell' call on Ranhill with a lower target price of RM1.02 per share after trimming its earnings estimates due to the cost overrun at Ranhill Worley Sdn Bhd (RWSB). 'While the entry of a strong controlling shareholder in YTL Power is one that could yield synergistic benefits due to its expertise in the water sector, we view that the strong run-up in Ranhill's share price since April 2024 values it at a stretched 24.2 times of financial year 2026 (FY26) price-to-earnings ratio as compared to a historical mean of 20 times and a compressed dividend yield of only 3.1%,' it noted. The research house also expects Ranhill SAJ Sdn Bhd to continue contributing strongly to the company's earnings moving forward, attributable to the data centre (DC) growth in Johor and the upcoming economic growth prospects from the Johor-Singapore Special Economic Zone (SEZ) and Special Financial Zone. 'We understand that the group is working closely with YTL Power and the state government in identifying new water resources and in restructuring the tariffs,' added MIDF Research. Given Ranhill's results underperformance, TA Research said it has trimmed Ranhill's FY25-FY26 earnings by 15% and 1% respectively, mainly to reflect the cost overrun at RWSB. On the water segment, the brokerage said Johor would benefit from the influx of DC infrastructure, in part, given spillover demand from Singapore. 'As Johor's source-to-tap water supply operator, Ranhill is expected to benefit from increased water demand from DCs for cooling purposes,' it noted. TA Research also gathered that the National Water Services Commission is currently reviewing water tariff for the non-domestic sector, in particular for high consumption users, including the DC industry. 'Should it materialise, the tariff revision could be a positive catalyst for Ranhill,' TA Research pointed out. As for the power segment, the research house said Ranhill had proposed an extension to the power purchase agreement for its 190MW Teluk Salut Power Plant beyond its existing concession term that expires in 2029 to address the growing energy demand in Sabah. Ranhill is also looking to participate in the Corporate Renewable Energy Supply Scheme introduced by the Energy Transition and Water Transformation Ministry (Petra) which allows corporate consumers access to green electricity by procuring green electricity supply directly from a renewable energy producer. YTL Power, the group's major shareholder, has plans to develop a 500MW solar farm at its YTL Johor Data Centre Park in Kulai. 'We do not rule out possibilities of this project being parked under Ranhill, which could provide another catalyst for the group further out.' Despite the research house's downward tweak to Ranhill's earnings, it has raised the target price to RM1.40 as 'we reduce the risk premium for 80%-owned Ranhill SAJ Sdn Bhd in our valuations'. This is on the back of a potentially more favourable regulatory environment, which is more receptive to tariff increases that better reflects industry capex requirements. TA Research said 'In line with this, and following share price retracement in the past week, we upgrade Ranhill to a 'buy' from 'sell' previously.' Meanwhile, RHB Research said the catalysts for Ranhill include strong water demand in Johor in the coming years backed by industrial investments namely in DCs, manufacturing plants which could be part of the Johor-Singapore SEZ and Petra to introduce a new water tariff category for DCs. The research house, which has a 'buy' call on the stock, has kept its target price at RM1.37.
Yahoo
12-05-2025
- Business
- Yahoo
Ranhill Utilities Berhad's (KLSE:RANHILL) investors will be pleased with their strong 172% return over the last three years
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. For instance the Ranhill Utilities Berhad (KLSE:RANHILL) share price is 153% higher than it was three years ago. Most would be happy with that. So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress. We've discovered 2 warning signs about Ranhill Utilities Berhad. View them for free. In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. Ranhill Utilities Berhad was able to grow its EPS at 15% per year over three years, sending the share price higher. In comparison, the 36% per year gain in the share price outpaces the EPS growth. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. It is quite common to see investors become enamoured with a business, after a few years of solid progress. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here. It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Ranhill Utilities Berhad the TSR over the last 3 years was 172%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! We regret to report that Ranhill Utilities Berhad shareholders are down 7.9% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 3.3%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 7%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Ranhill Utilities Berhad better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Ranhill Utilities Berhad you should know about. If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Yahoo
12-05-2025
- Business
- Yahoo
Ranhill Utilities Berhad's (KLSE:RANHILL) investors will be pleased with their strong 172% return over the last three years
The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. For instance the Ranhill Utilities Berhad (KLSE:RANHILL) share price is 153% higher than it was three years ago. Most would be happy with that. So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress. We've discovered 2 warning signs about Ranhill Utilities Berhad. View them for free. In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement. Ranhill Utilities Berhad was able to grow its EPS at 15% per year over three years, sending the share price higher. In comparison, the 36% per year gain in the share price outpaces the EPS growth. This suggests that, as the business progressed over the last few years, it gained the confidence of market participants. It is quite common to see investors become enamoured with a business, after a few years of solid progress. You can see how EPS has changed over time in the image below (click on the chart to see the exact values). Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here. It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Ranhill Utilities Berhad the TSR over the last 3 years was 172%, which is better than the share price return mentioned above. This is largely a result of its dividend payments! We regret to report that Ranhill Utilities Berhad shareholders are down 7.9% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 3.3%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 7%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Ranhill Utilities Berhad better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Ranhill Utilities Berhad you should know about. If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying. Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
