KUALA LUMPUR: Hong Leong Investment Bank Research (HLIB Research) has recommended a ˜buy call on Tenaga Nasional Bhd (TNB) at a higher target price of RM16. HLIB Research said it has maintained ˜overweight call on power sector and upgraded its target price on TNB shares from RM15 to RM16, based on a discounted cash flow to equity valuation, after rolled-forward its valuation up to financial year 2016. œWe maintained our ˜overweight call on the power sector as the government continued to push through industry transformation and transparency. œOur top pick of the industry is TNB as it is benefitting from the current low coal price environment, as well as the governments determination to see through the implementation of ˜Incentive-Based Regulation and ˜Fuel Cost Pass Through framework, which ensure earnings and cash-flow certainties, said HLIB Research in a note today. The research house said the government has shown its commitment to protect TNBs interest when it agreed to compensate TNBs cost under-recovery of RM848 million last year.
To continue reading the rest of the article, click here