Tenaga top gainer on 1Q profit, upgrades

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KUALA LUMPUR (Jan 23): Tenaga Nasional Bhd rose as much as 64 sen or 4% after the state-controlled utility reported a 34% net profit rise from a year earlier. The better financials have invited analyst upgrades on the firm.

Tenaga (fundamental: 1.3; valuation: 1) rose to an intraday high of RM15.16 before paring gains. At 9.30am, the stock changed hands at RM15.14 with some four million shares done.

The FBM KLCI added 24.99 points or 1.4% to 1,806.74.

Yesterday, Tenaga said net profit climbed to RM2.35 billion in the first quarter ended November 30, 2014 (1QFY15) from RM1.75 billion a year earlier. Revenue was higher at RM11.03 billion versus RM9.57 billion.

Today, Public Investment Bank Bhd analyst Syarifah Hidayatul Akmal said Tenaga's 1QFY15 core net profit of RM2.3 billion, which excluded foreign exchange gains, constituted 33.4% and 36.1% of Public Investment's and consensus estimates respectively.

Syarifah Hidayatul wrote in a note today Public Investment had raised its Tenaga net profit forecast by between 25% and 40% from FY15 till FY17. She said the profit forecast took into account cheaper coal and crude oil for electricity generation.

Public Investment also upped its target price for Tenaga shares to RM14.64 from RM12.32 previously.

"We maintain our neutral call on TNB (Tenaga) as we believe with most of the reform initiatives rolled out and majority of new capacity plant-ups awarded, there will be lack of catalysts going forward.

"Furthermore, the government had recently announced there will be no electricity tariff revision for 2015," Syarifah Hidayatul said.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)