DayOne Data Centre potential catalyst for TNB profit

By the Editorial Team · Thursday, September 3, 2026

Tenaga Nasional Bhd (TNB) is planning a 1.5-gigawatt on-site power generation project with DayOne Data Centre, which is expected to boost its earnings and improve the utilisation of its capital expenditure. This deal, coupled with TNB’s renewable energy initiatives and strategic energy supply agreements, could increase the company’s net profit forecast by 8% in 2028 and support its expansion in the growing data centre sector.

Tenaga Nasional Bhd (TNB) stands to benefit from improved earnings and enhanced utilisation of its capital expenditure if its proposed 1.5-gigawatt (GW) on-site power generation deal with DayOne Data Centre in Selangor proceeds as planned. The project is expected to support the rising electricity demands of data centres while advancing TNB’s renewable energy and battery storage initiatives.

RHB Research projects that if TNB undertakes a 1.5GW solar installation paired with battery energy storage at 50% capacity, and holds a 70% stake in the venture through a 21-year agreement, the internal rate of return (IRR) could reach 10%. The scheme is estimated to add approximately RM448 million to TNB’s earnings, potentially driving an 8% increase in the company’s net profit forecast for 2028. This outlook supports RHB Research’s "buy" recommendation on TNB shares, with a target price of RM16.50, indicating around 20% upside, coupled with a projected dividend yield of about 4% for the 2026 financial year.

The proposed arrangement may also involve the Corporate Renewable Energy Supply Scheme (Cress), enabling TNB to deliver renewable energy to DayOne. Earlier this year, TNB signed a 21-year Cress contract to supply power from a 595-megawatt alternating current (MWac) Hybrid Hydro Floating Solar (HHFS) project located in Kenyir. RHB Research estimates the Kenyir initiative could contribute 3% of TNB’s net profit by 2028.

Expanding on-site generation with DayOne would bolster TNB’s presence in the data centre sector and support its planned capital expenditure. TNB currently has 8.4GW of energy supply agreements (ESAs) signed with new data centres and aims to secure an additional 5GW in the coming years. The collaboration with DayOne could accelerate this pipeline, improving capex utilisation.

TNB’s management remains optimistic about securing two-thirds of its Regulatory Period 4 capex approvals, which RHB Research estimates could increase the company’s earnings per share and target price by 7% in 2026. The research firm underscored that TNB’s valuation premium is warranted given its role as a principal beneficiary of the National Energy Transition Roadmap, supported by a regulated framework that provides earnings stability.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.