KUALA LUMPUR (Dec 9): Hong Leong IB Research has maintained its “Buy” rating on Tenaga Nasional Bhd with an unchanged target price of RM15.80 after the government  announced lower tariff rebate of 1.52sen/kWh for 1H16 (versus 2.25sen/kWh for previous 2 rounds), due to higher piped gas prices for 1H16 (RM18.20/mmBTU from current level RM15.20/mmBTU).

In a note today, the research house said it was Neutral on the announcement, given the lower rebates is just a pass-through of differences between actual energy costs and benchmarked energy costs to end consumers (no impact to Tenaga).

“Remained positive of Tenaga prospects and maintain Buy with unchanged target price RM15.80 based on DCFE.