KUALA LUMPUR: CIMB Equities Research is maintaining its Neutral stance on Tenaga Nasional and its end-CY10 target price stays at RM9.15 based on an unchanged forward price-to-book value of 1.4 times.
It said on Wednesday, April 14 Tenaga's 2QFY8/10 results, scheduled for release on April 20, are likely to beat expectations.
“But beyond the potential results outperformance, we see limited re-rating catalysts. Although there is some market speculation of a mid-year tariff hike, we do not see an urgent need to raise tariffs then,” it said.
The more pressing issue is Tenaga's vulnerability to rising fuel costs which could return to the limelight in FY11 in the absence of a transparent formula.
CIMB Research said other concerns include uncertainty about its i) role in the Bakun and undersea cable project, and ii) succession plan as its CEO's contract will lapse soon.
“Although we retain our FY10-12 earnings forecasts pending the results release, we flag that we may raise FY10 demand growth from 4.8% to 6-7%, which could raise our core earnings by 3-4%,” it said.
About Me
- Nuang
- Ibrahim bin Ramli@Nuang started his career with CIMB Wealth Advisors Berhad as Agency Manager in April, 2008.Previously he was an Internal Auditors and Accounts Executive with Perodua Sales Sdn Bhd since 17 August, 1994. His background:- 1.Certified of Achievement for Master Sales Leadership from Dr Lawrence Walter Ng of President of The Art Of Learning and International Of Learning Without Learning 2.Certified for eXtra Ordinary Performance of Lawrence Walter Award Certificate for One Million Ringgit Club 2007 3. Certified Life & General insurances 4. Conferred with Diploma in Business Studiess & Bachelor of Business Admin(Hons)Finance from UiTM, Terengganu Branch & Shah Alam respectively;
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