RESEARCH
6QFY25 Results Review
Higher Tariff to Drive Earnings
Upgrade to NEUTRAL
(previously RM1.02)
| Price @ 18th August 2025 (RM) | 1.39 |
| Expected share price return (%) | +0.8 |
| Expected dividend yield (%) | +2.0 |
| Expected total return (%) | +9.9 |
| FYE Dec | 2025E | 2026F | 2027F |
|---|---|---|---|
| Revenue | 6,877 | 6,921 | 7,934 |
| Operating Profit | 844 | 878 | 1,005 |
| Profit Before Tax | 995 | 1,027 | 1,083 |
| Core PATAMI | 904 | 959 | 947 |
| Core EPS | 13.56 | 14.39 | 14.20 |
| DPS | 7.00 | 7.00 | 7.00 |
| Dividend Yield | 1.4% | 1.4% | 1.4% |
| FBM KLCI | 1,584.96 |
| Issue shares (m) | 1288.64 |
| Estimated free float (%) | 19.22 |
| Market Capitalisation (RM’m) | 1,801.37 |
| 52-wk price range | RM1.08 – RM1.58 |
| 3-mth average daily volume (m) | 1.18 |
| 3-mth average daily value (RM’m) | 1.58 |
| SIPP Power Sdn Bhd | 34.32 |
| YTL Power International Bhd | 18.87 |
| United Overseas Bank Ltd | 9.09 |
Royce Tan Seng Hooi
royce.tan@midf.com.my
03-2173 8461
Upgrade to NEUTRAL. We are upgrading our recommendation on Ranhill to NEUTRAL from SELL previously, following a revision in our TP to RM1.50 from RM1.02 previously. While the FY25 results came in within our estimates, we have lifted our earnings projections for FY26 following the recent tariff revision starting Aug-25 that was gazetted by the Cabinet. We expect Ranhill SAJ to continue contributing strongly to the group’s earnings moving forward, attributable due to the growth of data centres in Johor and the upcoming economic growth prospects from the Johor-Singapore SEZ and Special Financial Zone. As for the power segment, Ranhill is exploring opportunities in the Corporate Renewable Energy Supply Scheme (CRESS) and also submitted a bid to the Energy Commission for the development of a 100MW/400MWh battery energy storage system (BESS) in Jul-25.
Within expectations. Ranhill posted a core net profit of RM20.8m in 6QFY25, which brought its 18-month cumulative bottom line to RM76.3m. This was within our expectations, exceeding our estimates by only +2.3%. It, however, came in above consensus expectations, exceeding estimates by +14.9% for the 18-month period. There is no comparison for the cumulative period due to the change in the group’s financial year end from 31st December to 30th June, in order for it to be coterminous with the holding company YTL Power International.
Key takeaways. Despite a lower revenue during the quarter by -10.1%qoq to RM504.9m, Ranhill’s core earnings jumped 2.5x quarter-on-quarter to RM20.8m, mainly due to the recognition of a government grant in RanhillSAJ. For the cumulative 18-month period, the group’s revenue surged +44.4% to RM3.29b, while core earnings grew +41.9% to RM76.3m. The water segment was the only profitable business, generating a PAT of RM133.2m, mainly from water revenue and the government grant, which is offset against higher lease rental. The power segment posted a -RM0.5m loss on the back of maintenance costs and interest expenses incurred on borrowings. For the consultancy and services segment, Ranhill Worley continued to incur a cost overrun linked to the P82 project, dragging the segment’s losses down to -RM38.9m.
Earnings revision. While the 18-month FY25 results were within expectations, we are revising our earnings estimates for FY26 higher by +10.4% to RM72.3m on the back of the recent tariff adjustment starting Aug-25, that was gazetted by the Cabinet. We also introduce our FY27 estimates. While domestic users are largely unaffected, the largest increase was for the non-domestic consumer segment while data centres will be charged a specific rate. Refer to Table 1 for more details.
| Type of Use | Utilisation | Previous Rate | New Rate | change (%) | ||
|---|---|---|---|---|---|---|
| Rate per cubic metre (RM) | Rate per cubic metre (RM) | |||||
| Domestic | 0 m3 – 20 m3 | 1.05 | 1.05 | 0.0% | ||
| 21 m3 – 35 m3 | 2.35 | 2.35 | 0.0% | |||
| > 35 m3 | 3.15 | 3.50 | 11.1% | |||
| Religious institutions/Welfare Approved | Average rate | 1.65 | 1.65 | 0.0% | ||
| Domestic Bulk | Average rate | 2.55 | 2.75 | 7.8% | ||
| Non-Domestic | 0 m3 – 35 m3 | 3.15 | 4.15 | 31.7% | ||
| > 35 m3 | 3.55 | 5.30 | 49.3% | |||
| Shipping | Average rate | 7.05 | 8.03 | 13.9% | ||
| Data Centre | Average rate | – | 5.33 | – | ||
| Domestic | 10.50 | 10.50 | 0.0% |
| Religious institutions/Welfare Approved | 16.50 | 16.50 | 0.0% |
| Domestic Bulk | 25.50 | 27.50 | 7.8% |
| Non-Domestic | 31.50 | 41.50 | 31.7% |
| Shipping | 70.50 | 80.30 | 13.9% |
| Data Centre | – | 53.30 | – |
Source: Ranhill SAJ, MBSBR
| Concessions | Valuation method | Value (RMm) |
Stake | Shares out |
RM/share |
|---|---|---|---|---|---|
| RP 1 | DCF | 20.2 | 60.0% | 1,295.9 | 0.01 |
| RP 2 | DCF | 96.9 | 80.0% | 1,295.9 | 0.06 |
| RS 1 | DCF | 221.1 | 100.0% | 1,295.9 | 0.17 |
| Water (SAJ) | DCF | 2,189.0 | 80.0% | 1,295.9 | 1.35 |
| NRW | EV/EBITDA | 87.1 | 100.0% | 1,295.9 | 0.07 |
| Associates | PER | 178.4 | 1,295.9 | 0.14 | |
| RBSB & RWSB | EV/EBITDA | 282.2 | 1,295.9 | 0.22 | |
| Gross value | 2,792.7 | 2.01 | |||
| Group net cash/(debt) | (668.4) | 1,295.9 | -0.52 | ||
| Net value | 2,124.3 | 1,295.9 | 1.50 |
| FYE Jun (RMm) | 2Q24 | 5Q25 | 6Q25 | QoQ | YoY | 18M25 | YTD |
|---|---|---|---|---|---|---|---|
| Revenue | 561.4 | 513.1 | 504.9 | -1.6% | -10.1% | 3,292.5 | 44.4% |
| EBITDA | 172.3 | 144.1 | 248.7 | 72.5% | 44.3% | 1,050.2 | 84.1% |
| Depreciation & amortisation | (130.9) | (127.7) | (217.9) | 70.7% | 66.5% | (834.6) | 103.4% |
| Operating profit | 35.9 | 10.6 | 25.1 | 136.5% | -30.2% | 183.2 | 28.6% |
| Net finance cost | (15.4) | (9.3) | (9.6) | 3.3% | -37.9% | (66.8) | 439.6% |
| Zakat | 0.0 | 0.0 | NA | NA | NA | ||
| Associates | 5.4 | 5.8 | 5.6 | -2.8% | 3.7% | 32.3 | 82.5% |
| Pretax | 26.0 | 7.1 | 21.2 | 196.3% | -18.5% | 148.8 | 0.6% |
| Tax | (16.1) | (5.9) | (4.5) | -23.4% | -72.1% | (55.6) | 10.8% |
| PAT | 9.9 | 1.3 | 16.7 | 1190.3% | 68.4% | 93.2 | -4.6% |
| MI | 3.4 | (5.7) | (1.1) | -80.7% | -132.3% | 17.5 | -61.0% |
| Net profit | 6.5 | 6.9 | 17.8 | 156.0% | 172.1% | 75.7 | 43.3% |
| Core net profit | 6.5 | 8.3 | 20.8 | 149.1% | 218.2% | 76.3 | 41.9% |
| Core EPS (sen) | 0.50 | 0.64 | 1.60 | 149.1% | 218.2% | 5.89 | 41.9% |
| DPS (sen) | 0.00 | 0.00 | 0.00 | 0.25 | |||
| EBITDA margin | 30.7% | 28.1% | 49.2% | 31.9% | |||
| Operating profit margin | 6.4% | 2.1% | 5.0% | 5.6% | |||
| Pretax margin | 4.6% | 1.4% | 4.2% | 4.5% | |||
| Effective tax rate | 61.9% | 81.9% | 21.2% | 37.4% | |||
| Core net profit margin | 1.2% | 1.6% | 4.1% | 2.3% | |||
| Dividend payout ratio | 0.0% | 0.0% | 0.0% | 4.2% |
Source: Company, MBSBR
| Profit or Loss (RM’m) | 2022A | 2023A | 2025A | 2026F | 2027F | Cash Flow (RM’m) | 2022A | 2023A | 2025A | 2026F | 2027F |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 1,726.3 | 2,280.8 | 3,292.5 | 2,615.0 | 2,676.1 | PBT | 203.4 | 147.9 | 148.8 | 150.7 | 207.1 |
| Operating profit | 200.6 | 142.5 | 183.2 | 207.6 | 222.9 | Depreciation | 387.1 | 410.6 | 834.6 | 404.4 | 401.9 |
| PBT | 203.4 | 147.9 | 148.8 | 187.1 | 207.1 | Change in NWC | -118.1 | 104.8 | -9.6 | -12.5 | -3.4 |
| Taxation | -61.2 | -43.9 | -55.6 | -55.6 | -61.5 | Operating cash flow | 130.0 | 228.8 | 1,029.1 | 146.0 | 167.0 |
| PAT | 95.3 | 57.9 | 75.7 | 72.3 | 80.1 | Capital expenditure | -49.4 | -38.7 | -81.9 | -30.0 | -30.0 |
| MI | 47.0 | 46.1 | 17.5 | 59.2 | 65.5 | Investing cash flow | -89.8 | -62.6 | -72.8 | -30.0 | -30.0 |
| PATAMI | 95.3 | 57.9 | 75.7 | 72.3 | 80.1 | Debt raised/(repaid) | 89.5 | -137.9 | -307.9 | -94.4 | -94.4 |
| Core PATAMI | 20.8 | 32.4 | 76.3 | 72.3 | 80.1 | Dividends paid | -19.8 | -27.7 | -9.2 | -36.2 | -40.7 |
| Financing cash flow | 3.0 | -292.4 | -221.6 | -130.6 | -135.1 | ||||||
| EPS (sen) | 1.6 | 2.5 | 5.9 | 5.6 | 6.2 | Net cash flow | 43.2 | -126.3 | 81.0 | -14.6 | 1.9 |
| PER (x) | 81.1 | 40.7 | 23.6 | 24.9 | 22.5 | Beginning cash flow | 201.9 | 245.4 | 4.4 | 71.0 | 56.4 |
| DPS (sen) | 2.5 | 3.5 | 0.3 | 2.8 | 3.1 | Ending cash flow | 388.9 | 279.0 | 184.2 | 219.2 | 221.1 |
| Dividend yield (%) | 1.1 | 1.1 | 0.2 | 2.0 | 2.2 | ||||||
| Balance Sheet (RM’m) | 2022A | 2023A | 2025A | 2026F | 2027F | Profitability Ratios (%) | 2022A | 2023A | 2025A | 2026F | 2027F |
|---|---|---|---|---|---|---|---|---|---|---|---|
| PPE | 250.6 | 314.6 | 299.4 | 333.0 | 316.4 | Operating profit margin | 11.6 | 6.2 | 5.6 | 7.9 | 8.3 |
| ROU assets | 1,470.3 | 1,273.0 | 1,827.9 | 1,173.0 | 873.0 | PBT margin | 11.8 | 6.5 | 4.5 | 7.2 | 7.9 |
| Non-current assets | 1,926.6 | 1,824.0 | 2,373.0 | 1,804.5 | 1,511.9 | PATAMI margin | 5.5 | 2.5 | 2.3 | 2.8 | 3.0 |
| Trade receivables | 552.0 | 506.8 | 583.5 | 581.2 | 594.8 | Core PATAMI margin | 1.2 | 1.4 | 2.3 | 2.8 | 3.0 |
| Cash & bank balances | 388.9 | 279.1 | 256.4 | 219.2 | 221.1 | ROA | 0.6 | 1.1 | 2.1 | 2.4 | 3.0 |
| Current assets | 1,357.8 | 1,155.6 | 1,251.7 | 1,185.0 | 1,204.2 | ROE | 2.2 | 3.2 | 7.3 | 6.1 | 6.3 |
| Long-term debt | 931.6 | 843.2 | 609.9 | 709.6 | 615.2 | ||||||
| Non-current liabilities | 1,293.8 | 1,203.3 | 1,202.8 | 969.7 | 575.3 | ||||||
| Short-term debt | 205.7 | 156.3 | 178.5 | 156.3 | 156.3 | ||||||
| Trade payables | 459.7 | 516.4 | 700.2 | 592.3 | 606.1 | ||||||
| Current liabilities | 1,033.5 | 765.4 | 1,376.8 | 841.2 | 855.1 | ||||||
Source: Bloomberg, MBSBR
MBSB RESEARCH (formerly known as MIDF RESEARCH) is part of MBSB Investment Bank Berhad (formerly known as MIDF Amanah Investment Bank Berhad) 197501002077 (24878-X).
(Bank Pelaburan) (A Participating Organisation of Bursa Malaysia Securities Berhad)
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MBSB INVESTMENT BANK (formerly known MIDF INVESTMENT BANK): GUIDE TO RECOMMENDATIONS
- BUY Total return is expected to be >10% over the next 12 months.
- TRADING BUY The stock price is expected to rise by >10% within 3 months after a Trading Buy rating has been assigned due to positive news flow.
- NEUTRAL Total return is expected to be between -10% and +10% over the next 12 months.
- SELL Total return is expected to be <-10% over the next 12 months.
- TRADING SELL The stock price is expected to fall by >10% within 3 months after a Trading Sell rating has been assigned due to negative news flow.
- POSITIVE The sector is expected to outperform the overall market over the next 12 months.
- NEUTRAL The sector is to perform in line with the overall market over the next 12 months.
- NEGATIVE The sector is expected to underperform the overall market over the next 12 months.
- Top 25% by ESG Ratings amongst PLCs in FBM EMAS that have been assessed by FTSE Russell
- Top 26-50% by ESG Ratings amongst PLCs in FBM EMAS that have been assessed by FTSE Russell
- Top 51%- 75% by ESG Ratings amongst PLCs in FBM EMAS that have been assessed by FTSE Russell
- Bottom 25% by ESG Ratings amongst PLCs in FBM EMAS that have been assessed by FTSE Russell
* ESG Ratings of PLCs in FBM EMAS that have been assessed by FTSE Russell in accordance with FTSE Russell ESG Ratings Methodology
