Friday, July 20, 2012

Tenaga Nasional: Maintain Buy - Cost-Sharing Boost

Cost-sharing lift. Tenaga's 9MFY8/12 core net profit of MYR2,255m (+20% YoY) was ahead of our and consensus expectations. The positive surprise relates to the booking of MYR1,145m in compensation from the Government and PETRONAS under a cost-sharing agreement for the burning of alternative fuels. The compensation amount has been verified and payments will ensue within the year. We maintain our BUY recommendation and raise our target price to MYR7.90 (from MYR7.40) after imputing lower coal costs and stronger power demand prospects.

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Source: Maybank Research - 20 July 2012

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