Thursday, July 12, 2012

Tenaga Nasional: Maintain Buy - 3QFY12: The last hiccup

Gas supply problem resurfaces again? Tenaga is scheduled to release its 3QFY12 results on 19 July. This is the new management's first results; however the results may disappoint due to natural gas supply disruption that necessitates the burning of more costly fuel oil and distillates. We remain bullish with Tenaga as the first shipment of LNG is on track for delivery in September which will put an end to this gas supply issue permanently. Also, coal prices are receding nicely by ±20%. 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 - 12 July 2012

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