BIMB Securities upgrades Gas Malaysia to Buy, ups target price to RM3.75

Business & Markets 2013
Written by theedgemalaysia.com
Thursday, 16 May 2013 10:00
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KUALA LUMPUR (May 16): BIMB Securities Research has upgraded
Gas Malaysia Bhd to Buy from Trading Buy at RM3.22 with a higher
target price of RM3.75 (from RM2.86) and said the company’s 1QFY13
bottomline of RM40.1 million made up 23% of the research house’s and
consensus estimates.
In a note Thursday, the research house said that with the Melaka LNG
regas facility targeted to be operational around next month and the
subsequent additional 40mmscfd supply of LNG from Petronas as well
as the positive economic forecast, it was now revising its volume growth
rate for FY13 and FY14 higher by 4 percentage points (ppts) and 2
ppts to 13% and 11% respectively.
“As such, earnings for FY13 and FY14 are upped by 4.6% and 7.0%.
Given i) strong cashflow generation, ii) zero debt balance sheet and iii)
manageable capex, we have raised our targeted dividend payout for
FY14 to 100% from 75%, while long term payout retained at 75%.
“Target price revised up to RM3.75, as we re-mark our discount rate.
Upgrade from Trading Buy to Buy,” it said.