Tenaga Nasional Berhad (TNB) Navigates Strategic Partnerships and Regulatory Challenges in 2025

Tenaga Nasional Berhad (TNB), listed on Bursa Malaysia under the ticker KL:TENAGA, continues to reinforce its position as Malaysia’s leading electric utility. The company’s market capitalization stands at MYR 77.1 billion, with a price‑to‑earnings ratio of 16.21 and a recent closing price of MYR 13.22. The 52‑week range for the stock is MYR 12.66 to MYR 15.04, reflecting modest volatility amid broader market movements.

1. Strengthening International Grid Connectivity

On 26 October 2025, TNB signed a memorandum of understanding (MoU) with the State Grid Corporation of China (SGCC), through its subsidiary China Electric Power Equipment and Technology Co Ltd (CET). The agreement aims to enhance power‑grid cooperation between the two utilities, covering technology transfer, joint development of smart‑grid solutions, and collaborative research on grid reliability. TNB’s statement highlighted the strategic importance of the partnership for improving transmission capacity and facilitating cross‑border electricity trade.

The MoU follows a broader trend of regional utilities seeking to modernise infrastructure and secure new sources of clean energy. By leveraging SGCC’s extensive experience in grid management, TNB intends to accelerate the deployment of advanced grid technologies and improve the resilience of Malaysia’s national grid.

2. Commitment to Malaysia’s National Energy Transition Plan (NETR)

During the ASEAN Energy Business Forum (AEBF‑25) held from 15 to 17 October, TNB’s Retail Chief Executive Officer, Datuk Kamal Arifin A Rahman, reiterated the company’s commitment to supporting Malaysia’s transition to cleaner energy. The company is working closely with industry and consumer stakeholders to promote the adoption of sustainable power sources in line with the National Energy Transition Plan (NETR).

TNB’s initiatives include:

  • Renewable Energy Integration – Expanding the capacity of solar and wind farms across the country.
  • Energy Efficiency Programs – Implementing smart metering and demand‑side management to reduce peak load.
  • Collaborative Partnerships – Engaging with private sector players to accelerate the deployment of green technologies.

These efforts are designed to align TNB’s operations with the country’s goal of increasing the share of renewable energy in the national mix, thereby contributing to long‑term environmental sustainability.

3. Market Sentiment and Stock Performance

Bursa Malaysia opened higher on 27 October 2025, buoyed by positive sentiment following strong performance in U.S. markets. The FTSE Bursa Malaysia KLCI rose by 9.32 points to 1,622.59, reflecting broader confidence across heavy‑weight stocks, including utilities. TNB’s share price mirrored this trend, maintaining a stable position within its 52‑week range.

Investors remain attentive to TNB’s strategic developments, particularly its international partnership with SGCC and its role in Malaysia’s energy transition. The company’s robust cash flow and healthy balance sheet support ongoing dividend payments and capital expenditure plans.

4. Regulatory and Tax Implications

TNB faces potential cost implications from Malaysia’s planned carbon tax, which is expected to impose an additional expense of RM388 million—over 9% of its 2024 net profit—primarily affecting coal‑based power producers. While the tax will increase operational costs for utilities, TNB’s diversified generation portfolio and focus on renewable integration position it to manage the impact more effectively.

Additionally, recent commentary from Galaxy Securities highlighted that despite a 12% stock price decline over the past four months, the company’s valuation could still increase by up to 28% if a favorable tax settlement is reached. The firm’s analysis underscores TNB’s capacity to sustain dividend payouts and capital projects even under full tax liability.

Summary

TNB’s recent activities—signing an MoU with SGCC, reinforcing its commitment to Malaysia’s green energy agenda, and navigating market dynamics—illustrate the company’s strategic focus on technological advancement, international collaboration, and regulatory adaptation. The firm’s solid financial fundamentals and active engagement in the national energy transition are expected to underpin its continued growth and resilience in the evolving utilities landscape.