---
endpoint: analytics
pattern: Power
status: done
latency_ms: 202017
conversation_id: 18b3a8a1-396c-430f-9388-73a8df1c5e37
citations: 0
created: 2026-05-31 18:53:05Z
---

# Is CLSA incrementally more positive/negative on Tenaga. If so, why?

## CLSA on Tenaga Nasional (TNB MK): Incrementally MORE Positive

**Short answer: Yes, modestly more positive.** CLSA raised TP from RM17.20 → RM17.60 in March 2025 (the first TP move in 6+ months of dedicated coverage) and has held the higher TP and Outperform call in the most recent note. The driver is the new regulatory cycle (RP4, 2025-27) translating into a materially larger regulated asset base, accelerating data-centre demand, and channel-check confirmation that capex spending is starting to flow.

Note on corpus vintage: latest dedicated CLSA Tenaga note in this archive is dated **27 May 2025**. The trajectory below is read relative to that.

### Trajectory of CLSA's house view on Tenaga

| Date | Note title | Rating | TP (RM) | Delta |
|---|---|---|---|---|
| 29 Aug 2024 | Respectable numbers | O-PF | 17.20 | (baseline) [12] |
| 28 Nov 2024 | Promising outlook | O-PF | 17.20 | unchanged [9] |
| 26 Dec 2024 | The much awaited RP4 | O-PF | 17.20 | unchanged [11] |
| 19 Jan 2025 | Opportunity to accumulate | O-PF | 17.20 | unchanged [10] |
| **2 Mar 2025** | **Closing strong** | **O-PF** | **17.60** | **+RM0.40 ↑** [5][6] |
| 27 May 2025 | Fresh start | O-PF | 17.60 | maintained [1] |

### Why the incremental positivity — three reinforcing reasons

**1. Regulatory Period 4 (RP4) parameters were better than expected, and the regulated asset base is now expanding faster.** RP4 (the 2025-27 cycle) was finalised end-2024 with the net regulatory return held at 7.3% and total capex roughly *doubled* to RM42.8bn, including RM16.3bn of newly-introduced "contingent" capex that can be tapped if demand surprises [11]. The +29% higher base capex flows directly into the regulated asset base (RM68.8bn at end-2024) and was the catalyst for the March TP raise to RM17.60 [7][6]. CLSA also lifted 2025-26 earnings 3.2%-8.9% to bake in the new RP4 parameters [6].

**2. Data-centre-led demand is materialising, not just promised.** Channel checks now point to a quarterly data-centre roll-out run-rate of ~100MW reaching 2.58GW by 2030 — i.e. 13.8% of overall demand [7]. In 2024, electricity demand growth (+6.2%) outpaced Malaysian GDP (+5.1%) for the first time, with data centres consuming 434.5MW or 2.2% of national consumption [5]. The May 27 update added a fresh confirmation: the commercial segment (the data-centre proxy) grew +5.1% YoY in 1Q25 and offset a -5.5% YoY industrial drag [3]. The note also flagged that "more contracts will be awarded to cable companies in the upcoming quarters to upgrade grid and transmission lines" — meaning Tenaga's regulated capex envelope will actually be utilised, not just approved [1].

**3. Earnings quality and execution improving alongside the regulatory tailwind.** 1Q25 core net profit of RM1.18bn was +10.5% YoY / +28.1% QoQ on revenue of RM16bn (+17.6% YoY); CLSA called the result in line despite an unusually high 33% effective tax rate (vs 21% in 4Q24), which is timing-related and will normalise in 2H [2]. The Genco arm — historically a drag — posted a 6.4% EBIT margin in 1Q25 vs 4.6% for FY2024 after Manjung 4 resumed operations [3]. CLSA's 2025-27 financial framework now shows: Revenue 63.0 → 65.8 → 68.7 RMbn, Net profit 5.20 → 5.29 → 5.21 RMbn, ROE rising to 8.4%, leverage falling from 60.4% to 51.0% [4].

### Important nuance — the upgrade is modest, not aggressive

- The TP move was only +2.3% (RM17.20 → RM17.60), and CLSA has now *held* RM17.60 across two consecutive notes despite the data-centre theme strengthening.
- CLSA's 2025-27 estimates assume only 4.5% YoY electricity growth and explicitly do **not** include any upside from the RM16.3bn RP4 contingent capex bucket, which "is likely to be utilised in 2026-27 should the demand grow at a much faster pace" [3]. This is a deliberately conservative posture — there is reserved optionality the May 27 note flags as not in the model.
- Rating has been stuck at Outperform (O-PF) the entire 2024-25 window. CLSA has not moved to Buy/Conviction-list status, so the incremental positivity is best described as "more conviction in the same call," not a rating upgrade.
- Tenaga has remained CLSA's Malaysia top pick / key sector pick throughout, anchoring the consistency of the bull view [9][12][6].

### Bottom line

CLSA is **incrementally more positive** on Tenaga because (i) the RP4 capex parameters came in materially above the prior cycle and have now been translated into higher earnings and a 2.3% TP raise, (ii) the data-centre demand story has moved from "promised" to "executing" with cable contracts being awarded and commercial-segment growth outpacing industrials, and (iii) Genco performance is improving in parallel. The upgrade is calibrated, not loud — TP move was small, rating is unchanged, and CLSA is keeping RM16.3bn of RP4 contingent capex out of the model as embedded upside.

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**Sources**
[1] Tenaga – O-PF (Fresh start) — CLSA, 27 May 2025 — 607960696LinqAlpha.PDF
[2] Tenaga – O-PF (Fresh start) — CLSA, 27 May 2025 — 607960696LinqAlpha.PDF
[3] Tenaga – O-PF (Fresh start) — CLSA, 27 May 2025 — 607960696LinqAlpha.PDF
[4] Tenaga – O-PF (Fresh start) — CLSA, 27 May 2025 — 607960696LinqAlpha.PDF (Financials table)
[5] Tenaga – O-PF (Closing strong) — CLSA, 2 Mar 2025 — 607951951LinqAlpha.PDF
[6] Tenaga – O-PF (Closing strong) — CLSA, 2 Mar 2025 — 607951951LinqAlpha.PDF (TP raise commentary)
[7] Tenaga – O-PF (Closing strong) — CLSA, 2 Mar 2025 — 607951951LinqAlpha.PDF (data-centre run-rate)
[8] Tenaga – O-PF (Closing strong) — CLSA, 2 Mar 2025 — 607951951LinqAlpha.PDF (Financials forecast change)
[9] Tenaga – O-PF (Promising outlook) — CLSA, 28 Nov 2024 — 607945723LinqAlpha.PDF
[10] Tenaga – O-PF (Opportunity to accumulate) — CLSA, 19 Jan 2025 — 607948481LinqAlpha.PDF
[11] Tenaga – O-PF (The much awaited RP4) — CLSA, 26 Dec 2024 — 607947189LinqAlpha.PDF
[12] Tenaga – O-PF (Respectable numbers) — CLSA, 29 Aug 2024 — 607937984LinqAlpha.PDF

