July 12, 2010

TENAGA - AmResearch maintains Buy on Tenaga

Stock Name: TENAGA
Company Name: TENAGA NASIONAL BHD
Research House: AMMB

KUALA LUMPUR: AmResearch says Tenaga is currently trading at an attractive CY10F PE of 11 times vis-''-vis its five-year average of 14 times.

It said on Monday, July 12 that it reiterated its BUY call with an unchanged DCF-based fair value of RM10 per share.

The factors are (1) Resurgence in power consumption growth; (2) Appreciating Ringgit; (3) Improving economies of scale with declining power reserve margin - currently at 45%; 4) Potential corporate moves such as bonus or increasing dividend payout; and (5) Return of foreign investors to one of the most liquid stocks on Bursa Malaysia.


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