Tenaga Nasional

[winston]

not vested

Focusing on RE portfolio

Following our recent meeting, we gather that TNB has no plans to spin off its GenCo and RetailCo at this juncture. It will focus on growing its RE portfolio.

TNB will pay IRB the sum of RM1.76bn on a “without prejudice basis”. This amount is recoverable if the group wins its tax claim cases. Maintain Add. TP 13.20

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... B3C0132D32

[winston]

not vested

TENAGA (RM9.78 – BUY- HLIB RESEARCH TP RM12.50) – Buy on dips as risk-reward profile turns attractive

We believe values have re-emerged after the stock tumbled 25% from a 52-week high to close at RM9.78, supported by stable FY19-22 EPS CAGR of 9.9%, undemanding valuations of 10.9x FY22E (-30% vs 5Y mean 15.7x) and 1.03x P/B (-26% vs 5Y mean 1.4x) coupled with attractive DY of 6.1% for FY21-22

Although share price could remain tepid due to expectations of slower consumption arising from ongoing MCO 2.0 (the impact is less severe than MCO 1.0 more industries are allowed to operate), further liquidations by foreigners (foreigners’ stake at lowest level of 14% in Sep 20 since the implementation of IBR & ICPT in 2014) and ESG concern due to the dependents on coal power plant, we believe these risks have been largely priced in

Key re-rating factors for the stock include:
a) active capital management;
b) a fair outcome from RP3; and
c) operational savings from Tenaga’s reorganisation exercise

Potential downtrend reversal amid the formation of Harami cross pattern

R1-R2: 10.00-10.40
LT objective: 11.200
S1-S2: 9.50-9.30
Cut: 9.10

Source: HLIB

[winston]

not vested

Tenaga Nasional (TNB MK)
A Future-Proof Business Model

TNB is focusing on sustainable energy solutions as it wants coal-related revenue to fall
to 20% by 2030.

TNB’s RE targets include a 300mw hydro power plant, seeking LSS4 contracts and acquiring a 39% stake in the Sunseap Vietnam solar project.

As TNB meets its ESG mandate, the business is expected to yield sustainable returns and pave the way for 5% dividend yield over 2021-22.

RP3 discussions are underway, announcement towards 4Q21.

Maintain BUY. Target price: RM13.70.

Source: UOBKH

https://research.uobkayhian.com/content ... d5852caec7

[winston]

High demand for power charges up sector

In the first quarter of 2024 (1Q24), electricity demand rose at a much faster 9.6% year-on-year (y-o-y) versus gross domestic product growth of 4.2%, largely driven by stronger commercial (up 11.2%) and domestic (up 16.8%) segments.

TNB should also continue benefiting from the continuous upgrade in transmission and distribution assets, where energy demand can be anchored by mushrooming data centre developments.

Source: The Star

https://www.thestar.com.my/business/bus ... -up-sector

[winston]

not vested

Broadening RE horizons
An important RE platform

Vantage RE (Vantage) is Tenaga’s renewable energy (RE) platform in the UK and Europe.

While not a material earnings contributor, its presence at the forefront of mature RE markets plays an important role in Tenaga’s RE talent development and the longer-term fulfilment of Tenaga’s ESG (emission) targets.

We view Tenaga’s risk-reward as being balanced presently.

Maintain HOLD with an unchanged DCF-based TP of MYR13.50.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/391692.pdf

[winston]

not vested

PublicInvest upgrades TNB to 'outperform', expects capex to increase by RM1b to RM2b yearly to meet data centre power demand

By Isabelle Francis

TNB is expected to keep increasing its capital expenditure (capex) beyond 2030, with an additional RM1 billion to RM2 billion a year, to maintain its power grid infrastructure, which recently hit new peak demand due to data centres.

The additional capex is on top of TNB’s committed RM90 billion for six years until 2030, to support energy transition initiatives and system upgrades.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/719602

[winston]

not vested

A good accumulating opportunity

We view the 10% pullback in Tenaga’s share price over the past month as a compelling buying opportunity, as our investment thesis remains intact.

Tenaga is, in our view, a liquid large cap index linked proxy to two key themes in Malaysia:
1) NETR and
2) surge in FDIs into the country.

We expect to see several catalysts unfold over the next 6-12months, which should, in our view, aide in further solidifying the group’s growth prospects.

Source: CIMB

https://rfs.cgsi.com/api/download?file= ... 1E5A2E6763

[winston]

Significant upside potential to TNB’s earnings expected

TNB is a liquid large-cap index-linked proxy to two key themes, namely the National Energy Transition Roadmap and the surging foreign direct investments (FDIs) into the country.

Significant upside potential to its earnings via higher regulated returns from the incremental RM35bil that is earmarked by TNB for grid upgrades.

These investments can add at least RM1.2bil incremental earnings per year once fully spent by 2030, under the Incentive Based Regulation framework, which represents about 35% of its average 2022 to 2023 normalised net profit of RM3.3bil.

Other catalysts are the fifth cycle of large-scale solar capacity awards and information on key regulatory and financial parameters for the next regulatory period which could help crystallise TNB’s longer-term earnings prospects.

About 28% of TNB’s total outstanding debt is in foreign currencies, primarily US dollar and pound, and to a lesser extent, yen, Australian dollar and euro.

Source: The Star

https://www.thestar.com.my/business/bus ... e=smartech

[winston]

not vested

[b]TNB's 2Q profit jumps over fourfold to RM1.45b amid higher electricity sales,

By Choy Nyen Yiau

Net profit for the second quarter ended June 30, 2024 (2QFY2024) jumped more than fourfold to RM1.45 billion from RM327.9 million a year ago.

Quarterly revenue grew 7.83% y-o-y to RM14.4 billion

The group recorded a forex translation gain of RM130.2 million in 2QFY2024, versus a forex translation loss of RM453.5 million in 2QFY2023.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/724832

[winston]

not vested

Tenaga Nasional (TNB MK)

1H24: Results Within Expectation; A Strong Quarter

TNB booked a strong 2Q24 core net profit of RM1,314m (+44% qoq, +68% yoy).

This brought 1H24 core net profit to RM2,226m (+27% yoy), in line with expectations.

All in all, 2Q24 net profit was driven by a flow-through from revenue, positive TNB genco contribution, higher associate earnings, lower interest expenses and lower effective tax rates.

Maintain HOLD with a DCF-based target price of RM13.20.

Foreign shareholding stood at 15.3% as of Jul 24.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email