April 4, 2011

TENAGA - Tenaga remains a long term buy, says OSK Research

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

KUALA LUMPUR: OSK Research has maintained its buy recommendation on TENAGA NASIONAL BHD [] with a fair value of RM7.54 after Tenaga awarded the Janamanjung 1x1000MW coal-fired power plant extension to a consortium led by Alstom for a total of RM5.02 billion.

It said this was largely within its expectations and that it saw some subcontracts coming the way of local CONSTRUCTION [] companies such as Mudajaya.

'We estimate that Tenaga will enjoy some RM2 billion in savings over the lifetime of the plant but make no changes to our estimates as this has been built in.

'Without clarity on tariff hikes, Tenaga remains a Long Term Buy. The company will be announcing a biogas JV with Sime Darby today,' it said in a note Monday, April 4.

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