[%XAus%] and [%wLja%] Guys, just couple of questions on PBA's cost looking for your brilliant insights.  

Any idea about [%pMkR%]'s raw water pricing structure and if Kedah is allow to adjust as and when it deems fit? And what if Kedah decides to hike the price now that PBA has increased its tariff, does PBA still need to wait for 3-years to adjust the price?

@charlieM and @GoldieLoh Guys, just couple of questions on PBA's cost looking for your brilliant insights.  

Any idea about $KLSE-PBA's raw water pricing structure and if Kedah is allow to adjust as and when it deems fit? And what if Kedah decides to hike the price now that PBA has increased its tariff, does PBA still need to wait for 3-years to adjust the price?

@GoldieLoh You nailed it. With the ability to raise prices every 3 years and pass on incremental costs, PBA is in a different and better position compared to the past. Its earnings growth are likely to sustain over the next 3-4 years with the upcoming tariff hikes in Jan 2026 (for nondomestic users) and Feb 2027 (domestic users).

Valuation wise, the stock is still undervalued. It's peak P/B ratio was 1.2x in 2004 when ROE was 9%. At your estimated 150m earnings, which I think is achievable, it's ROE would be 15%. I believe the stock should be valued at a minimum 1.5x book value if it can achieve 150m earnings.