In the progressive journey of Malaysia’s National Energy Transition Roadmap (NETR), six pivotal areas of transition have been identified: Energy Efficiency (EE), Renewable Energy (RE), Hydrogen (HY), Bioenergy (BI), Green Mobility (GM), and Carbon Capture, Utilisation and Storage (CC). This transition opens vast opportunities for forward-thinking companies. A key player emerging in this landscape is Kinergy Advancement Berhad (KAB).

KAB’s Evolution Beyond Conventional Boundaries

Traditionally perceived as a firm entrenched in Electrical and Mechanical Engineering (M&E), KAB has significantly expanded its horizons. In 2021, KAB embarked on a bold venture into Sustainable Energy Solutions (SES), marking its debut with substantial Solar PV projects across Malaysia and Thailand.

This move was complemented by the strategic acquisition of Dynagen Power (M) Sdn Bhd, further enhancing KAB’s capabilities in Co-Generation, a lesser-known yet highly efficient form of energy generation.

Co-Generation — A New Frontier for KAB

Co-generation, utilising cleaner energy sources like natural gas, exemplifies KAB’s innovative approach in energy generation. This process efficiently converts natural gas heat into steam or hot water, widely used in industrial processes, while simultaneously generating electricity.

KAB’s Diverse Portfolio in Sustainable Energy

KAB’s SES roadmap is diverse, encompassing hydroelectric power, biogas/biomass energy, and solar PV systems. A notable achievement was the approval for a mini-hydropower plant in Indonesia under PT Inpola Mitra Elektrindo (PT IME). This 11 MWp project in Pakpak Bharat, North Sumatera, secured a Power Purchase Agreement (PPA) with PT Perusahaan Listrik Negara (PLN), ensuring steady revenue streams.

Strategic Partnerships and Expansion

KAB’s momentum continued with a partnership in July 2023 with XSD International Paper Sdn Bhd (XSDIP) for its inaugural biomass project, showcasing a cogeneration plant capable of producing significant electricity and steam. This venture aligns with KAB’s Develop, Own, and Operate (DOO) model, setting a precedent in the industry.

Additionally, KAB has partnered with Petronas Gas Berhad, co-owning a RM230.0 million power plant project in Sabah, directly supplying energy to Petronas’s floating liquified natural gas facility. This partnership not only contributes significant revenue but also cements KAB’s reputation as a technical partner of renown.

Financial Outlook and Market Positioning

KAB has shown a commendable performance, with a normalised PE of 24.36 times at RM0.340 as of Q3FY2023. When compared to its peers in the Malaysian RE sector, KAB presents a compelling investment case, with potential for even greater valuation, given its diverse involvement in EE, RE, and BI sectors of NETR.

Conclusion

Kinergy Advancement Berhad stands at the forefront of Malaysia’s energy transition, demonstrating robust growth, strategic partnerships, and a commitment to sustainable energy solutions. Its diverse portfolio and innovative projects position it as a promising investment opportunity in the evolving energy sector.