Will SCGBHD Benefit from Budget 2026?
Yes, SCGBHD is well-positioned to benefit from Malaysia's Budget 2026, which emphasizes energy transition, infrastructure development, and regional power connectivity. The budget's total development expenditure of RM81 billion includes targeted allocations that align directly with the company's core products. Here's a breakdown of the key opportunities:
#### 1. **Power Transmission and Grid Infrastructure**
- **Southern Link Transmission Line Project**: An allocation of RM765 million for this major power transmission initiative will require extensive cabling for high-voltage distribution, directly supporting SCGBHD's power cable segment.
- **ASEAN Power Grid Focus**: The government is prioritizing the Vietnam–Malaysia–Singapore renewable energy transmission project in collaboration with Tenaga Nasional Bhd (TNB) and Petronas. This cross-border grid expansion demands specialized transmission cables, boosting demand in the utilities sector.
- **Rural Electrification**: RM700 million under basic rural infrastructure for clean water and electricity upgrades, including streetlights (RM90 million allocation), will drive local cabling needs.
#### 2. **Energy Transition and Renewables**
- **National Energy Transition Fund**: RM150 million to support the National Energy Transition Roadmap (NETR), with GLICs and GLCs mobilizing RM16.5 billion for green projects like solar farms (e.g., UEM Lesetra's developments in Segamat, Melaka, and Selangor) and EV charging expansions. These initiatives require cabling for solar interconnections and charging infrastructure.
- **Renewable Energy Quotas**: An additional 300MW under the Feed-In Tariff program and nearly 2GW from Large-Scale Solar (LSS6) projects, attracting RM6 billion in private investment, will necessitate grid-tied cabling solutions.
- **Incentives for Green Tech**: 100% Green Investment Tax Allowance for companies using locally made green technology products (certified by MyHIJAU Mark), plus RM20 million in rebates for energy-efficient equipment. This encourages adoption of efficient cabling in sustainable projects.
#### 3. **Communications and Submarine Cables**
- **Madani Submarine Cable Connection (Salam)**: RM2 billion for a 3,190km undersea network linking Johor to Sarawak and Sabah. As a communications cable project managed by MCMC, it aligns with SCGBHD's expertise in communication wires.
- **Digital Infrastructure**: RM780 million for JENDELA 2 broadband expansion to 2,700 locations and RM770 million for Phase 2 Point of Presence near industrial areas, increasing demand for data transmission cables.
#### Broader Market Context