KUALA LUMPUR (Oct 28): CIMB Investment Bank Bhd said Tenaga Nasional Bhd's latest annual core net profit surpassed CIMB's and Bloomberg consensus forecast by 3% and 7% respectively.

In a note today, CIMB analyst Saw Xiao Jun said state-controlled utility Tenaga's core net profit had excluded foreign exchange translation losses.

Yesterday, Tenaga said net profit climbed to RM1.76 billion in the fourth quarter ended Aug 31, 2016 (4QFY16) from RM820.9 million a year earlier. Full-year net profit was higher at RM7.37 billion versus RM6.12 billion.

Tenaga proposed a dividend of 22 sen a share for the quarter in review. The dividend brings the full-year payout to 32 sen a share.

Today, Saw said: "FY8/16 core net profit beats our expectation by 3% and Bloomberg consensus by 7%, due mainly to lower-than-expected tax expenses."

"Tenaga's FY16 core net profit was 13% higher yoy, at RM7.7 billion. This is a record high for the company. The strong earnings growth was driven by the 4% growth in electricity consumption in Peninsular Malaysia, lower tax rate, and the 4.6% growth in its average tariff," he said.

Saw said CIMB had maintained its target price (TP) of RM17 for Tenaga shares with an unchanged "add" call.

Meanwhile, TA Securities Holdings Bhd maintained its "buy" recommendation for Tenaga shares with an unchanged TP of RM16.87.

"We believe investors will now gravitate towards liquid blue chip counters with stable earnings and strong balance sheet. This is given macro headwinds and muted earnings growth for cyclical companies," TA Securities said.

At Bursa Malaysia, Tenaga shares rose 16 sen or 1% at 10:54am to RM14.48 for a market value of RM81.67 billion. Tenaga was the seventh-largest gainer across the exchange.