TNB downgraded after it shoulders electricity subsidy burden
It will fork out up to RM150 million by absorbing the impact of electricity tariff fuel surcharge exemption for consumers.
Tenaga Nasional Bhd (TNB) has seen its stock rating downgraded by research firms after the company announced it would absorb the costs of an additional electricity subsidy for households. TA Securities and UOB Kay Hian both reduced their ratings on TNB, with TA cutting their target price and UOB questioning the long-term stability of the subsidy framework.
The Malaysian government recently expanded the electricity tariff fuel surcharge exemption to households consuming between 600 and 800 kilowatt-hours (kWh) of power monthly, previously only covering those under 600kWh. TNB agreed to cover the estimated RM120 million to RM150 million cost until the end of 2026, impacting around eight million domestic users.
While some research houses maintain a "buy" rating, emphasizing the cost as manageable, others see this as a sign of regulatory risk for TNB. The utility's shares are currently trading at RM13.04, slightly below their year-to-date valuation of RM76.01 billion.
Written by urgent.news from Free Malaysia Today's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- TNB downgraded after it shoulders electricity subsidy burden freemalaysiatoday.com
