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Penang is the 2^nd smallest state in Malaysia, but one of the biggest contributor to Malaysia’s trade surplus. Penang is also often among the top states receiving foreign investments, especially in the E&E and semiconductor segments.

Many of the biggest companies in the world, such as Intel, AMD, Dell, Micron, Broadcom, B. Braun, Jabil etc have major plants in Penang, mainly concentrated around the Bayan Lepas Free Industrial Zone and Batu Kawan Industrial Park. In fact, Penang contributes ~5% of the semiconductor sales in the world, which lead to them gaining the moniker of “Silicon Valley of the East”.

Without going into too much details, allow me to postulate that increasing economic activity and population lead to increasing demand for water and energy. At the very least, for continued economic activity, water and energy usage will no doubt be required.

As an investor in Malaysia, there aren’t many ways to get exposure to this defensive industry. There are only 2 listed companies that are directly involved in the water distribution in Malaysia, which are PBA from Pulau Pinang, and Ranhill SAJ from Johor.

Data Taken as at 16 Jan 2026, numbers are rounded

The valuation discrepancy between the two companies are stark.

Brief Background on PBA

PBA is the sole licensed water operator of Pulau Pinang and is 65% held by the Penang State Government via the Penang State Secretary and Penang Development Corporation.

PBA get their revenue by selling treated water to end users like you and me (if we were from Penang), as well as to factories, businesses, and so on. Their main costs comes from the treatment raw water and distribution of treated water, including maintaining the pipelines, running the water treatment plants, and so on.

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