Tenaga Nasional Bhd (Bhd) is seen to benefit from Malaysia's energy transition agenda.
MIDF Research raised its rating on TNB to 'buy' from 'hold' because it is confident that it will be central to the agenda.
The government is now aggressive in renewable energy (RE) targets and constructive policies for the transition.
The research firm said TNB is not only expected to earn additional returns following the expansion of RE capacity, but could also accelerate its efforts to decarbonize the grid.
Under Malaysia's Renewable Energy Roadmap, nine gigawatts (GW) of RE capacity is required by 2035, according to MIDF.
He added that the National Energy Transition Roadmap (NETR) also focuses on a 70% RE mix target which suggests the need for new RE capacity of more than 30GW until 2050.
Following that, it argues that TNB is one of the main beneficiaries of the opportunity due to its large balance sheet.
At the time of writing, TNB shares were trading unchanged at around RM9.60 with a market capitalization of RM55.56 billion.
