KUALA LUMPUR: With the rapid expansion of hyperscale data centres across Malaysia generating significant demand for mechanical, electrical and power infrastructure works, Kinergy Advancement Bhd is well-positioned to capture on this growth.
Apex Research noted that Kinergy’s Construction Industry Development Board Grade 7 registration, established mechanical, electrical, and plumbing (MEP) credentials and industrial client relationships position the group to capture this structural tailwind, with strategic bolt-on acquisitions a further option to deepen exposure to hyperscale customers.
The research firm said that Kinergy’s engineering services remain an under-appreciated second growth engine, and the hyperscale data centre rollout across Malaysia is driving MEP demand that Kinergy’s established engineering credentials position it well to capture.
Apex Research noted that Kinergy is Malaysia’s only integrated energy company spanning all four solution pillars, namely renewable energy, clean energy, energy efficiency and engineering services, enabling cross-segment self-consumption (Selco) wins and structurally superior margins.
Apex Research said Kinergy’s quality-of-earnings re-rating is in progress and a growing zero-capex recurring income portfolio is structurally undervalued relative to the lumpier engineering, procurement, construction, and commissioning (EPCC) revenue line, with the Perbadanan Kemajuan Negeri Perak (PKNPk), Permodalan Kedah Bhd (PKB) and Perlis combined cycle gas turbine (CCGT) pipelines providing material unmodelled upside.
The zero-capex asset portfolio (28MW operational) generates a recurring concession-based income stream that grows independently of order book replenishment.
Further, the PKNPK partnership (1,800MW Perak pipeline) and the PKB river and dam site rights represent a multi-year runway to materially expand this recurring income base.
Apex Research said Kinergy’s meaningful independent power producer (IPP) optionality remains unpriced.
Kinergy holds an effective 41% indirect economic interest in the Perlis CCGT site through its 51% stake in Jati Cakerawala, which is partnered with Thailand’s B.Grimm Power to develop a new 1.5GW combined-cycle gas turbine power plant.
In addition, the Energy Commission issued an initial letter of notification in January 2026 — a formal regulatory milestone.
“We model zero contribution in the long-term cashflows of this project in our base case, making this meaningful IPP optionality that remains entirely unpriced in our target price.
“We initiate coverage on Kinergy with a Buy recommendation and a target price of RM0.67, derived by applying the sector peer average price-earnings (PE) multiple of 22.7x to our FY28 core net profit of RM64 million, and supported by a three-star ESG rating,” Apex Research said.
