Tuesday, July 31, 2012

Gas Malaysia: Hold - Just 'gas' it!

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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