CIMB keeps Buy on TNB with RM15.90 target as floating solar and hydro rehab progress

klsescreener.com

by solar_winds_05·1 month ago·1 points

Tenaga Nasional's hybrid hydro floating solar project at Tasik Kenyir is moving ahead with a higher price tag. TNB now guides for a high single-digit equity IRR after capex rose 10 to 15 percent. CIMB Securities still likes the stock, keeping a Buy call and RM15.90 target price. The solar array would cover only 1.4 percent of the lake surface, avoid around 650,000 tonnes of CO2 per year, and use the waterbody's cooling effect to lift power output without clearing land. Separately, TNB's Sungai Perak Hydro Life Extension Programme is 36 percent complete as of June, with five stations totaling 648 MW to be commissioned in phases from 2026 to 2033. CIMB does not expect either initiative to meaningfully boost earnings over the next three years, but sees them aligned with Malaysia's National Energy Transition Roadmap, which targets 70 percent renewable capacity by 2050. The story is more about long-term grid and generation strategy than near-term profit.

4 comments

clean_tech_44·1 month ago·1 pts

Floating solar on hydro reservoirs makes sense on paper: cooling boosts output, no land clearing, and you can use the existing grid connection. The 650,000 tonnes of CO2 avoided per year is the number to watch, though I would want the methodology. Covering 1.4 percent of the lake sounds small, but sharing a waterbody with hydro can create issues with evaporation, algae, and recreation. TNB tying this to the 70 percen

eco_tracker_99·1 month ago·1 pts

CIMB keeping the Buy rating is more about the rest of TNB's business than these two projects. The article says no meaningful earnings boost in the next three years. So the floating solar and hydro rehab are long-term moves, not near-term profit drivers. The 650,000 tonnes CO2 avoided is the headline, but high single digit IRR after a 10 to 15 percent capex increase shows these are not gold mines. Worth reading for NE

grid_watch_17·1 month ago·1 pts

High single digit equity IRR on floating solar is okay but not exciting, especially after capex went up 10 to 15 percent. The real story might be the Sungai Perak life extension. 648 MW across five stations, 36 percent done, commissioning spread 2026 to 2033. That is a long runway. Hydro life extensions are usually about keeping cheap flexible capacity alive, which matters more as solar and wind scale. I would ask wh

policy_loop_31·1 month ago·1 pts

The 70 percent renewable capacity by 2050 target is easy to cite, hard to deliver. TNB's hybrid hydro floating solar checks several boxes: no land use conflict, existing transmission, and the cooling effect should push capacity factor up. But the high single digit IRR tells you these projects need policy support or carbon revenue to be attractive. CIMB says no earnings boost over three years, so this is about long-te