Coal boost. Coal prices have retreated by over 20% in the past three
months in tandem with the global commodity selloff. This is beneficial
for Tenaga as coal is its single largest cost component (~21% of total
cost). Every USD1/tonne decrease in average coal prices for FY8/12 will
boost earnings by MYR47m or +1.8% from our base forecast profit. There
is significant scope for earnings upgrades if the current situation
persists. Maintain BUY, with an unchanged TP of MYR7.40/share based on
FY8/13 PER of 13x, in line with its historical average PER.
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Source: Maybank Research - 21 June 2012
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