TNB's local/foreign investments long-term growth catalyst, says TA

TNB's local/foreign investments long-term growth catalyst, says TA
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Wednesday, 12 June 2013 11:57


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KUALA LUMPUR (June 12): TENAGA NASIONAL BHD []’s (TNB) aggressive investment in electricity generation assets for both domestic and international markets is a strong catalyst for its long-term earnings growth, said TA Securities today.

The research house is maintaining its “buy” call on the state utility giant, with a target price of RM9.79.

At 11:25 am, TNB inched down one sen to RM8.29 after trading between RM8.25 and RM8.33. The counter had a trading volume of 2.31 million.

In a research note, TA analyst James Ratnam also commented favourably on a news report of TNB considering bidding for the retail and power generation unit of Irish state-owned gas company, Bord Gais Eireann.

“We see a confident TNB that’s ready to expand its power business beyond its domestic market. With the domestic market saturating, as electricity demand growth is tapering at 3% to 5% per annum, the group has so far aggressively seeking overseas revenue, although mostly confined to operations and maintenance contracts and to operate individual power plants," said Ratnam.

He noted that TNB had in January announced a RM1 billion-power plant joint venture in Kuwait.