- We reiterate our BUY call on Tenaga Nasional (Tenaga),
with an unchanged DCF-derived fair value of RM8.15/share, which implies an
FY13F PE of 11x and a P/BV of 1.3x.
- Khazanah Nasional plans to sell up to 60 million shares or
an estimated 1% stake for RM408 million in Tenaga, Business Times reported
today. This will reduce Khazanah’s stake in Tenaga to 34%, still the largest
institutional investor after EPF at 14%. The selling price of RM6.80/share for
Tenaga’s shares is 2% lower than the closing price of RM6.92 yesterday.
- Business Times also reported that CIMB Group Holdings Bhd
and Deutsche Bank are the joint bookrunners on the share sale.
- In our view, the equity disposal does not affect Tenaga’s
fundamentals. Additionally, Khazanah, which had an equity stake of 38% in
Tenaga in August 2009, has been gradual in its disposals, which we understand
are to improve its liquidity in the market.
- We note that coal prices has risen from US$80/tonne last
month to US$90/tonne currently due to the winter season, but this is likely to
decline early next year given a expectations of softer demand from China.
Hence, we maintain Tenaga’s FY13F-FY15F net profits, which assume all-in coal
prices at US$90/tonne.
- We continue to like Tenaga as the group’s long-term
earnings prospects are supported by the group’s likelihood in securing upcoming
new power plant capacities of up to 3,000MW. Furthermore, the group’s near-term
earnings are more transparent given that electricity and natural gas prices are
stable until mid-2013.
- The stock currently trades at a P/BV of 1.1x, at the lower
end of the 1x-2.6x range over the past 5 years. Tenaga also offers an
attractive FY13F PE of 10x, compared with the stock’s three-year average band
of 9x-16x.
Source: AmeSecurities
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