It boasts a monopoly of natural gas supply to Peninsular Malaysia’s small and medium users. It is tapping into additional gas supply from new regasficaition terminals including the secured 29% increased in gas supply from Petronas beginning in 2013.
More RGT projects in Johor and Terengganu, along with clarity on Malaysia ’s LNG pricing mechanism will catalyst the stock.
Gas Malaysia has the highest barrier to entry, being the sole holder of a 20 year license to distribute gas to customers consuming up to two mmscfd.
It operates downstream of Petronas Gas Bhd which serves power generation companies and Petronas chemicals bhd. Another barrier to entry is the heavy capex of about rm1 billion.
Its growth prospects lie in volume growth. It has secured 29% more gas from Petronas on a stepped up basis, starting FY2013 after LNG imports commence in Sept 2012.