KUALA LUMPUR: CIMB Equities Research said TENAGA NASIONAL BHD []'s core net profit at the halfway stage accounted for only 47% of its and consensus full-year forecasts.
'We consider it to be below expectations as 2H earnings are expected to remain weak due to higher fuel costs. However, the 4.5 sen interim dividend was within our estimate. We now cut our FY8/11-12 core EPS by 7-8% for slower demand growth as well as higher coal price and usage,' it said on Friday, April 22.
CIMB Research said as a result, its end-CY11 target price, which is based on a forward P/BV of 1.2x, falls by 7 sen to RM6.82.
It remained NEUTRAL on Tenaga given the lack of near-term catalysts and cost pressures. There appears to be no near-term relief from the higher fuel costs as the government is unlikely to raise tariffs in an election year, it said.
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'We prefer YTL Power for exposure to the power sector,' it said.
'We consider it to be below expectations as 2H earnings are expected to remain weak due to higher fuel costs. However, the 4.5 sen interim dividend was within our estimate. We now cut our FY8/11-12 core EPS by 7-8% for slower demand growth as well as higher coal price and usage,' it said on Friday, April 22.
CIMB Research said as a result, its end-CY11 target price, which is based on a forward P/BV of 1.2x, falls by 7 sen to RM6.82.
It remained NEUTRAL on Tenaga given the lack of near-term catalysts and cost pressures. There appears to be no near-term relief from the higher fuel costs as the government is unlikely to raise tariffs in an election year, it said.
''
'We prefer YTL Power for exposure to the power sector,' it said.
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