RHB Research maintains Outperform on Tenaga, FV RM7.80 (5347)

KUALA LUMPUR: RHB Research Institute is maintains its Outperform call on Tenaga Nasional Bhd (TNB)
while it raised its fair value to RM7.80 from RM7.60 based on unchanged
target FY13 PER of 15 times (eight-year average is 17 times) and
revised FY13 EPS of 52.2 sen.
It said on Friday that short-term
sentiment on TNB should remain intact with the fuel cost sharing
mechanism in place until September.
“We remain optimistic for
TNB on LNG pricing from the Malacca LNG regasification plant, as the
government has consistently shown that any changes to gas pricing will
have an earnings neutral impact to TNB,” it said.
RHB Research
said that excluding the after-tax fuel cost compensation accrued for
November 2011 to May 2012 (RM777mil) and forex loss of RM540mil, TNB's
nine-months FY12 results were below its and consensus expectations.
The
research house said TNB's core net profit of RM1.44bil (up 80.1%
on-year) accounted for only 66% and 53% of its and consensus full-year
estimates respectively.
The key variance was
higher-than-expected oil and distillate fuel usage as the gas supply
situation, once thought to have normalised, took a turn for the worse
since April amid robust electricity demand.