Written by Joseph Chin
Tuesday, 06 April 2010 10:03
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KUALA LUMPUR: Shares of TENAGA NASIONAL BHD [] surged in early trade on Tuesday, April 6 after AmResearch reiterated its BUY call with a higher fair value of RM10.00 a share.
At 9.57am, it was up 36 sen to RM8.46 with 1.31 million shares done.
The FBM KLCI was up 3.4 points to 1,345.15. Turnover was 227.91 million shares valued at RM223.81 million. There were 252 gainers, 175 losers and 223 stocks unchanged.
AmResearch said it expected Tenaga's 2QFY10 results, to be announced on April 29, to be stronger than expected due to a sharp rebound in electricity demand growth while coal costs remain under control.
The research house raised Tenaga's demand growth to 5% from 4% in FY10F and 6% from 5% in FY11F. This raised FY10F-FY12F net profit by 5%-8% and AmResearch’s DCF from RM9.90/share to RM11.10.
“Applying a 10% discount for tariff review uncertainty, our fair value translates to RM10 per share,” it said.