KUALA LUMPUR (Oct 31): CIMB Equities Research said the worst is over for TENAGA NASIONAL BHD [] as a higher gas allocation in FY12 will boost its earnings.
It said on Monday that this was offset by the lack of a complete fuel cost pass-through mechanism, which means that Tenaga has to absorb coal costs above US$85/mt and is susceptible to gas supply shocks.
“FY8/11 core net profit was 5% below our forecast and 10% above consensus. As expected, there was no final dividend. We fine-tune FY12-13 EPS and introduce FY14 numbers.
“We raise our target price (1.1x P/BV) after rolling it over to end-2012. Our target price also goes up from RM6.00 to RM6.47. Still a HOLD,” it said.
It said on Monday that this was offset by the lack of a complete fuel cost pass-through mechanism, which means that Tenaga has to absorb coal costs above US$85/mt and is susceptible to gas supply shocks.
“FY8/11 core net profit was 5% below our forecast and 10% above consensus. As expected, there was no final dividend. We fine-tune FY12-13 EPS and introduce FY14 numbers.
“We raise our target price (1.1x P/BV) after rolling it over to end-2012. Our target price also goes up from RM6.00 to RM6.47. Still a HOLD,” it said.
