Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD
Research House: OSK
KUALA LUMPUR: OSK Research has raised the target price for Tenaga Nasional to RM10.04 from the earlier RM9.38.
It said on Tuesday, April 13 the share price was finally playing catch up, it incorporates the effects of stronger demand (4.7% growth versus 3.0% previously for FY10).
It had included a stronger ringgit (RM3.25/USD versus RM3.45 previously) to end up with a 12.7% increase in its FY10 forecast net profit.
"We also increase our FY11 and FY12 net profit by 7% and 4.5% respectively, which raise our DCF-based fair value to RM10.04. We maintain Tenaga as one of our Top Big Cap Buys," it said.
OSK Research said it had not incorporated a tariff hike into its numbers although Petronas' plan to import LNG into the peninsula would imply that gas subsidies would be withdrawn before imports start in 2013.
It also said its sensitivity analysis shows that Tenaga should see a 1.1% PAT rise for every USD1 drop in coal price and a 4.2% PAT rise for every 1% increase in demand.
"As such, given the US$5.1 effective fall in coal price and 1.7% increase in demand growth, our net profit is raised by 12.7% for FY10. The expected coal price hikes for FY11 and FY12 tone down our net profit hike to 7% and 4.5% respectively," it added.
The research house said its DCF based fair value is accordingly raised to RM10.04. It maintains its Buy call and bring attention to the fact that its forecasts and fair value do not incorporate any tariff hike adjustment.
Company Name: TENAGA NASIONAL BHD
Research House: OSK
KUALA LUMPUR: OSK Research has raised the target price for Tenaga Nasional to RM10.04 from the earlier RM9.38.
It said on Tuesday, April 13 the share price was finally playing catch up, it incorporates the effects of stronger demand (4.7% growth versus 3.0% previously for FY10).
It had included a stronger ringgit (RM3.25/USD versus RM3.45 previously) to end up with a 12.7% increase in its FY10 forecast net profit.
"We also increase our FY11 and FY12 net profit by 7% and 4.5% respectively, which raise our DCF-based fair value to RM10.04. We maintain Tenaga as one of our Top Big Cap Buys," it said.
OSK Research said it had not incorporated a tariff hike into its numbers although Petronas' plan to import LNG into the peninsula would imply that gas subsidies would be withdrawn before imports start in 2013.
It also said its sensitivity analysis shows that Tenaga should see a 1.1% PAT rise for every USD1 drop in coal price and a 4.2% PAT rise for every 1% increase in demand.
"As such, given the US$5.1 effective fall in coal price and 1.7% increase in demand growth, our net profit is raised by 12.7% for FY10. The expected coal price hikes for FY11 and FY12 tone down our net profit hike to 7% and 4.5% respectively," it added.
The research house said its DCF based fair value is accordingly raised to RM10.04. It maintains its Buy call and bring attention to the fact that its forecasts and fair value do not incorporate any tariff hike adjustment.
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