January 9, 2015

Affin Hwang reiterates 'buy' call on TNB

Stock Name: TENAGA
Research House: Affin Hwang CapitalPrice Call: BUYTarget Price: 16.50

KUALA LUMPUR: Affin Hwang Investment Bank Research has reiterated its "Buy" call on Tenaga Nasional Bhd (TNB) with an unchanged target price (TP) of RM16.50 per share.

The research house said it did not expect any negative surprises in TNB's first quarter of its financial year ending 2015 (FY15) earnings, as fuel costs should be well managed amid the stable gas supply.

"Going forward, we expect electricity demand growth to rebound while earnings visibility should remain strong in FY15," it said in a note Friday.

It added TNB had resilient business model and robust cash flows, and a longer-term catalyst would be the automatic implementation of the Imbalance Cost Pass Through (ICPT) mechanism, which would give it strong earnings visibility by being insulated from fluctuations in fuel costs.

ICPT is a mechanism that allows TNB to reflect changes (either an increase or reduction) of the uncontrollable fuel costs in the electricity tariff every six months. In the event of a reduction in fuel costs, TNB will also pass through the reduction to customers.

At 11.40 am, TNB shares on Bursa Malaysia was flat at RM14.20, with 3.11 million units traded. - BERNAMA

January 7, 2015

MIDF reiterates 'buy' call on AirAsia

Stock Name: AIRASIA
Company Name: AIRASIA BHD
Research House: MIDFPrice Call: BUYTarget Price: 3.70

KUALA LUMPUR: MIDF Research has reiterated its "buy" call on AirAsia Bhd with an unchanged target price of RM3.70 per share.

The research house said the current share price weakness presents a good buying opportunity and expects confidence to return from the second quarter onwards. "We maintain the buy call and target price, premised on 10 times AirAsia's financial year 2015 earnings.

"We believe that a revocation of AirAsia Indonesia's licence is unlikely and the AirAsia Group's market share would be protected by the strong presence in Asean," MIDF Research said in a note today.

AirAsia's share price has come under pressure following the suspension of its Indonesian affiliate's licence to operate the Surabaya-Singapore route pending an investigation.

At 11.40 am, AirAsia Bhd's shares on Bursa Malaysia chalked up six sen to RM2.55, with 14.09 million units traded. - BERNAMA