KUALA LUMPUR (April 10): RHB Research Institute Sdn Bhd has upgraded TENAGA NASIONAL BHD [] to Outperform and raised its fair value for to RM7.60 (from RM6.50 previously) and said it was turning more positive on Tenaga given better visibility of its earnings outlook with the improved gas supply.
In a results preview on Tuesday, RHB Researh said given that the gas supply situation had improved significantly to 1,100-1,150 mmscfd in 2Q (1Q: 1,050 mmscfd), it expectes earnings to jump quareter-on-quarter.
“We estimate 2Q core net profit of RM500 million-RM600 million (1QFY12: RM196 million, 2QFY11: RM442 million),” it said.
RHB Research said it gathered that Tenaga would write back the RM2.05 billionn compensation in 2Q.
It said this opened the possibility for Tenaga to resume paying dividends. For 1HFY12, we estimate electricity unit sales growth of 4.6%. This is within management’s guidance and our forecast of 4-5% and 4% respectively.
“We are turning more positive on Tenaga given better visibility of its earnings outlook with the improved gas supply. Fair value raised from RM6.50 to RM7.60 based on unchanged target FY13 PER of 15x and EPS of 50.8 sen after rolling over the valuation base year to 2013,” it said.
In a results preview on Tuesday, RHB Researh said given that the gas supply situation had improved significantly to 1,100-1,150 mmscfd in 2Q (1Q: 1,050 mmscfd), it expectes earnings to jump quareter-on-quarter.
“We estimate 2Q core net profit of RM500 million-RM600 million (1QFY12: RM196 million, 2QFY11: RM442 million),” it said.
RHB Research said it gathered that Tenaga would write back the RM2.05 billionn compensation in 2Q.
It said this opened the possibility for Tenaga to resume paying dividends. For 1HFY12, we estimate electricity unit sales growth of 4.6%. This is within management’s guidance and our forecast of 4-5% and 4% respectively.
“We are turning more positive on Tenaga given better visibility of its earnings outlook with the improved gas supply. Fair value raised from RM6.50 to RM7.60 based on unchanged target FY13 PER of 15x and EPS of 50.8 sen after rolling over the valuation base year to 2013,” it said.
