TENAGA (5347) - HLIB Research sees further electricity tariff cut in 2H15
KUALA LUMPUR (Feb 12): Hong Leong IB Research has maintained its “Buy” rating on Tenaga Nasional Bhd ( Financial Dashboard) with a lower target price of RM17 (from RM17.50) and said it remained positive on Tenaga’s long-term earnings growth after the announcement of a tariff cut.
In a note today, the research house said the government had announced tariff cut in Peninsular Malaysia by an average 2.25sen/kWh from March 1 to June 1, while Sabah and Labuan by 1.20sen/kWh, in order to pass back RM727m savings in cost over-recovery in 2014.
HLIB said it was surprised by the announcement of cost over-recovery of RM727 million versus previous guidance of cost under-recovery of RM824 million.
“We see further tariff cut in 2H15, given the expected adjustment in LNG price by Petronas.
“We have assumed lower average tariff and cut FY15-17 earnings by 2.2-7.9%.
“Remained positive on Tenaga’s long-term earnings growth. Maintained BUY with lower target price of RM17.00 (from RM17.50) based on DCFE,” it said.
http://www.theedgemarkets.com
KUALA LUMPUR (Feb 12): Hong Leong IB Research has maintained its “Buy” rating on Tenaga Nasional Bhd ( Financial Dashboard) with a lower target price of RM17 (from RM17.50) and said it remained positive on Tenaga’s long-term earnings growth after the announcement of a tariff cut.
In a note today, the research house said the government had announced tariff cut in Peninsular Malaysia by an average 2.25sen/kWh from March 1 to June 1, while Sabah and Labuan by 1.20sen/kWh, in order to pass back RM727m savings in cost over-recovery in 2014.
HLIB said it was surprised by the announcement of cost over-recovery of RM727 million versus previous guidance of cost under-recovery of RM824 million.
“We see further tariff cut in 2H15, given the expected adjustment in LNG price by Petronas.
“We have assumed lower average tariff and cut FY15-17 earnings by 2.2-7.9%.
“Remained positive on Tenaga’s long-term earnings growth. Maintained BUY with lower target price of RM17.00 (from RM17.50) based on DCFE,” it said.
http://www.theedgemarkets.com
