Initiating coverage with a Hold and MYR2.76 DCF-derived TP. Gas Malaysia
is the sole licensed operator and distributor of natural gas in
Peninsular Malaysia to customers who consume 5 mmscfd of natural gas and
below. It operates in a highly regulated environment, is financially
cash rich and could capitalize heads-on from the demand push for natural
gas in Malaysia as LNG import kicks-off in 2H12. Nonetheless, we
believe that most of the midterm prospects have been priced in. Current
price implies dividend yield of 4%, which is at the lower end of our
basket of net dividend yield play stocks of >5%.
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Source: Maybank Research - 31 July 2012
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