Tenaga Nasional Berhad Faces Mixed Market Signals Amidst New Project Win
Tenaga Nasional Berhad (TNB), Malaysia’s largest electric utility, closed the day before a broader decline in the Bursa Malaysia market, with its share price settling at 13.20 MYR on 7 October 2025. The company’s market capitalization stands at 76.94 billion MYR, and its price‑to‑earnings ratio of 16.18 places it in the upper middle of its sector peers. The 52‑week trading range for TNB is 12.66–15.04 MYR, indicating a relatively stable yet moderately pressured environment.
New Contract Signals Operational Momentum
A recent development that could buoy investor sentiment is the award of a power‑supply contract worth 33.94 million MYR to Pembinaan Bukit Cheeding Sdn Bhd., a wholly‑owned subsidiary of Cheeding Holdings Bhd. The acceptance letter, issued by TNB, confirms the subsidiary’s involvement in a new infrastructure project. This contract, while modest compared to TNB’s typical multi‑billion‑ringgit projects, demonstrates the utility’s continued reliance on established partners for expanding its supply capacity.
Cheeding’s own debut on the ACE Market earlier this week drew significant attention, with shares rising 94 % on the first day of trading. The company’s successful listing and its subsequent award of a contract from TNB reinforce the narrative that TNB remains a key client for firms specializing in power‑infrastructure solutions.
Market Context: A Broader Downturn
Despite the contract win, the broader Bursa Malaysia market experienced a negative close. On 8 October 2025, the index slipped as 623 counters posted losses against 463 gains, reflecting regional volatility and growing investor apprehension. Earlier, on 7 October, 717 counters lost against 368 gains, a trend that suggests a cautious stance among market participants, potentially dampening enthusiasm for utility stocks.
The decline is partly attributed to a “race to the bottom” in power‑sector pricing, a theme highlighted in The Edge Malaysia Weekly. Competitive bidding for new green‑energy projects has driven down long‑term equipment costs, tightening margins for utilities and their contractors alike. While this cost pressure could squeeze TNB’s operating profitability, it also positions the company to secure cheaper inputs for future expansion.
Outlook for TNB
TNB’s fundamentals—stable asset base, diversified generation and transmission portfolio, and a robust regulatory framework—provide a solid foundation for weathering short‑term market swings. The company’s ability to secure new contracts, even as small as the 33.94 million MYR deal with Cheeding, suggests that demand for its services remains resilient.
Investors should monitor the impact of falling equipment prices on TNB’s cost structure and the company’s strategic responses, such as pursuing renewable‑energy projects or leveraging contractual agreements to lock in favorable terms. As the national budget for 2026 unfolds, any fiscal measures aimed at supporting the trade‑reliant economy and green‑energy initiatives could also influence TNB’s growth trajectory.
In summary, while the Bursa Malaysia index reflected a cautious market mood, TNB’s recent contract win and strong fundamentals point to steady operational momentum. The utility’s continued engagement with contractors like Cheeding indicates a proactive approach to expanding its supply network, which could help maintain its market leadership amid a competitive and price‑sensitive sector.
