· On 25 September 2026, Kinergy proposed a new private placement of up to 218,497,717 new ordinary shares, or 10% of its issued shares excluding treasury shares. The placement may be carried out in tranches, with completion targeted by 1Q2027.
· At an illustrative price of RM0.365, an 8.84% discount to the 5-day VWAP of RM0.4004 up to the 18 September 2026 LPD, the placement is estimated to raise gross proceeds of up to RM79.8m with each tranche priced at a discount of not more than 10% to the 5-day VWAP.
· Proceeds are earmarked as RM49.4m (61.9%) to part-fund KABEH's 51% equity share of the Eentier Perlis 1,500 MW gas-fired CCGT plant, RM30.0m (37.6%) to repay bank borrowings and RM0.4m (0.5%) for expenses.
· Maintain BUY with an unchanged TP of RM0.67, based on 22.7x FY28F EPS of 2.94 sen. The proposal adds about 10% to the share base and is not yet in our forecasts; we will reassess the enlarged share base and earnings impact upon completion.
Placement Details. Kinergy proposes to place out up to 218,497,717 new ordinary shares, or 10% of its issued shares excluding treasury shares, under Sections 75 and 76 of the Companies Act 2016. The exercise draws on the general mandate obtained at the 29th AGM on 15 June 2026 and does not require further shareholder approval. As at the 18 September 2026 LPD, Kinergy had 2,184,977,171 issued shares, excluding 88,898 treasury shares. The shares will be placed to independent third-party investors in one or more tranches, with each tranche priced at a discount of not more than 10% to the 5-day VWAP.
Based on the illustrative price of RM0.365, an 8.84% discount to the 5-day VWAP of RM0.4004, gross proceeds would reach up to RM79.8m. Of this, RM49.4m (61.9%) is earmarked to part-fund KABEH's 51% equity share of the Eentier Perlis Power Plant, RM30.0m (37.6%) to repay overdrafts and revolving credits, and RM0.4m (0.5%) for expenses. The application to the authorities is expected within two months, with completion targeted by the first quarter of 2027.
Our View. The placement provides funding support for Kinergy’s expansion into independent power production (IPP). Through its wholly-owned subsidiary KABEH, the Group holds a 51% stake in Eentier Sdn Bhd, which is developing a 1,500MW gas-fired CCGT plant in Perlis on the brownfield site of a 650MW plant retired in 2024. It will be built in two 750MW phases, with the first due in 4Q2029 and the second in 4Q2031. TNB will be the Single Buyer under a long-term PPA, providing contracted, availability-based revenue once operational. The project remains at an early stage of development, with Kinergy currently holding only the initial Letter of Notification (iLoN), while the LoN and Phase 1 PPA are yet to be signed.
The RM49.4m earmarked is only the first instalment. The brownfield project's total cost of about RM4.7bn will be funded 80% by debt and 20% by equity. KABEH's equity share runs up to RM479.4m, with the placement covering 10% of that commitment. We view the placement as an initial funding step towards KABEH’s equity commitment to the project. The placement’s immediate benefit will show on the balance sheet, as the RM30.0m repayment cuts proforma gearing from 0.90x to 0.62x based on FY25 figures and will save about RM2.0m in interest a year. The share base could potentially increase by about 10% to 2,403.5m from 2,185.0m, resulting in EPS dilution upon issuance. This is partly mitigated by the RM30.0m debt repayment, which is expected to generate approximately RM2.0m in annual interest savings. Kinergy’s current orderbook stands at RM1.35bn across 24 projects, with a tender pipeline of RM3.73bn.
Forecast. Unchanged. We have yet to incorporate the proposed placement as the exercise has yet to be completed. Upon completion, we will reassess the impact of the enlarged share base, including the expected interest savings from debt repayment and the longer-term benefits from funding the Perlis CCGT project.
Maintain BUY with an unchanged TP of RM0.67. Our TP is based on 22.7x FY28F EPS of 2.94 sen, with a three-star ESG rating. As the proposed placement has yet to be completed, we have not incorporated the enlarged share base into our forecasts. On an illustrative fully diluted basis, assuming unchanged earnings, our fair value would be RM0.61. This excludes the potential earnings benefit from interest savings and the longer-term contribution from the Perlis CCGT project. We will reassess our forecasts and valuation upon completion of the placement.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.066846 | 4.098389 |
| EUR | 4.642019 | 4.645551 |
| CNY | 0.607873 | 0.608337 |
| HKD | 0.518664 | 0.522176 |
| SGD | 3.182150 | 3.203807 |