But, this should be the last of it. We believe that Tenaga's 1QFY12
results (scheduled for release on 17 January) will show it is still
loss-making due to lower-than-normal gas supply that requires burning
oil and distillates to generate power. At 4.0-4.3x the cost of gas, this
is a loss-making proposition. Nonetheless, this should be priced in.
The business outlook has improved following implementation of the cost
sharing mechanism that will provide at least RM2.0b to Tenaga, as well
as the possibility that Tenaga will be granted a tariff hike. Maintain
BUY, with unchanged target price of RM6.90 pegged to 13x FY12 PER.
Maybank research (10 January 2012)
Click here for full report
No comments:
Post a Comment