KUALA LUMPUR (Nov 13): AllianceDBS Research has recommended a Hold rating on Gas Malaysia Bhd (GMB) at RM3.50 with a lower target price of RM3.75 (from RM3.95) and said GMB’s stronger 3Q14 earnings were in line, driven by volume growth and stable margins.
In a note Thursday, the research house said concerns over mechanism to pass on higher gas cost in future
“The key concern for Gas Malaysia is the lack of clarity on the pricing mechanism to pass on higher gas cost.
“Hold for the strong balance sheet (RM291 million net cash) and 4% yield.
“We cut the DCF-based target price to RM3.75 after moving the valuation base to FY15F,” it said.