KUALA LUMPUR: AmResearch is downgrading its call on TENAGA NASIONAL BHD [] from BUY to HOLD with a lower discounted cashflow-derived fair value of RM9 a share from RM10 previously due to lower earnings expectations.
It said on Wednesday, Oct 20 this is partly due to a higher usage of coal, against a backdrop of a decline in natural gas output.
'The stock currently trades at a fair FY11F PE of 14 times ' which is Tenaga's three-year average. Tenaga's 4QFY10 results, which will be released on Oct 28, is likely to disappoint,' it said.
The main factors were higher coal usage arising from natural gas curtailment, delayed impact from higher coal prices in 3QFY10, and potential year-end provisions.
It said on Wednesday, Oct 20 this is partly due to a higher usage of coal, against a backdrop of a decline in natural gas output.
'The stock currently trades at a fair FY11F PE of 14 times ' which is Tenaga's three-year average. Tenaga's 4QFY10 results, which will be released on Oct 28, is likely to disappoint,' it said.
The main factors were higher coal usage arising from natural gas curtailment, delayed impact from higher coal prices in 3QFY10, and potential year-end provisions.
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