Friday, December 2, 2011

CIMB Research maintains Hold on Tenaga, TP RM6.47

KUALA LUMPUR (Dec 2): CIMB Equities Research said that investors should be cautious about the compensation for TENAGA NASIONAL BHD [] for the gas shortage as it was only an ad hoc payment.

It said on Friday that compensation for the gas shortage was good news as Tenaga's financial position has deteriorated substantially.

'But being an ad hoc payment rather than the proper cost pass-through mechanism that Tenaga needs, it leaves Tenaga vulnerable to future gas supply shocks.

"We maintain HOLD and our target price of RM6.47, based on 1.1 times price-to-book value,' said CIMB Research.

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