Brokers’ Digest – TENAGA NASIONAL BHD – THE EDGEPrint this page
Date: 26 April 2006
This week’s Brokers’ Digest contained excerpts of Standard and Poor’s (S&P) report on Tenaga Nasional. Tenaga’s 2QFY2006 results were slightly ahead of expectations with net profit for the cumulative six-month period making up 55% of S&P’s original forecast. S&P has trimmed its FY2006 net profit forecast by 7.8% to reflect expectations of higher average coal prices later in the year. It maintains its “buy” recommendation and 12-month target price of RM9.70. S&P is of the view that a tariff adjustment is inevitable although risks to its recommendation and target price include market disappointment from a prolonged delay of Tenaga’s tariff adjustment and over the perceived pace of organizational change, weaker-that-expected electricity demand growth and spiraling fuel costs.