TENAGA (5347) - TENAGA–Fundamental Analysis (4 Aug 2016)

TENAGA (5347) - TENAGA–Fundamental Analysis (4 Aug 2016)
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Latest Financial – Q3 2016 Financial Report (28 Jul 2016) and Analyst Briefing Presentation – 2016 – Q3
FY16 Q3 Results Highlight:
  • Peninsular Malaysia electricity demand grew 6.2% yoy in 3QFY16 (9MFY16: +4.5%).
  • Higher yoy in 9MFY16 mainly on higher nonfuel costs such as general expenses (+32.2% yoy) due to provisions for bad debt for certain industrial customers in the steel and iron industry.
  • 9MFY16 revenue rose by 5.6% yoy, driven by new electricity peak demand of 17,788MW in Apr-16 (+5.2% vs. previous peak of 16,901MW in Jun-14) due to El Nino. TENAGA’s 9MFY16 EBITDA improved 1.3ppts yoy to 33.6% on higher revenue despite higher general expenses (+32.2% yoy) involving a bad-debt provision for the steel and iron sector.
  • TENAGA registered strong electricity demand growth of 4.5% yoy in 9MFY16 (9MFY15: +2.5% yoy), mainly driven by 6.2% yoy growth in 3QFY16.

Going Forward:
  • (FFO – Dividends) / Debt in FY15 was 36% which is above global industry average (35%). I think TENAGA should consider to increase its dividend payout in view of its strong cash position.
  • In my opinion, fair value of TENAGA is from 16.7 to 17.2 (Uncertainty Risk is MEDIUM).
  • I will continue to hold this share, and accumulate it.
At the time of writing, I owned shares of TENAGA.

TENAGA (5347) - TENAGA–Fundamental Analysis (4 Aug 2016)