I feel tenaga will come soonnnnnnnnnnnnn
Written by CIMB Equities Research
Monday, 08 March 2010 08:57
KUALA LUMPUR: CIMB Equities Research sees brightening demand for TENAGA NASIONAL BHD [] as Peninsular Malaysia’s electricity sales in January showed growth of 13.2% yoy and 4.5% month-on-month.
It said on Monday, March 8 that this helped push power demand for the first five months of FY10 up 5.7% yoy, well ahead of the 3% growth that we are projecting and management is guiding.
"Taking our cue from i) the strong YTD showing and ii) our economist’s recent upgrade of the 2010 GDP growth estimate from 3.5% to 4.8%, we are now raising FY10’s power demand growth assumption from 3.0% to 4.8%," it said.
CIMB Research said this increased its FY10-12 core earnings by 7%-8%. It also jacked up FY10-12 DPS estimates by up to 25% as it brings its payout ratio assumptions closer to the minimum 40% of free cashflow.
"Despite the earnings upgrade and an unchanged forward P/BV multiple of 1.4x, our end-CY10 target price falls from RM9.30 to RM9.15 as the bigger DPS upgrades reduces Tenaga’s book value," it added.
It added although stronger power demand is positive for Tenaga, it saw limited near term re-rating catalysts for the stock and continue to rate the stock a HOLD. For exposure to the power sector, it preferred the IPPs, especially YTL Power.
