Friday, October 27, 2017

FW: AmBank Research - Tenaga Nasional : FY17 earnings delivered BUY, 27 Oct 2017




Tenaga Nasional : FY17 earnings delivered                                                            BUY


TNB clocked a 4QFY17 core profit of RM1.733bil (QoQ: -8.8%, YoY: -7.3%) bringing FY17 core profit to RM7,046bil (YoY: -8.8%). This was in line with our expectations but missed consensus estimates by 7%. A final dividend amounting to 44 sen/share was declared, bringing its total dividends to 61 sen/share for FY17 (FY16: 32 sen/share).


While we expect FY18F coal cost to persist at a 25% premium to FY17 amid ICPT and PPA saving fund projected surplus of RM0.3bil (Dec-17), TNB will remain financially neutral from any generation and fuel cost variations through the ICPT mechanism. Maintain BUY with a higher DCF-based FV of RM17.82 (from RM17.55) as we roll forward our valuations to FY18F (WACC: 7.7% terminal growth: 2.0%).


The release of the new regulatory period 2 parameters in December may remove uncertainty clouding TNB’s firm fundamentals. Resilient earnings visibility, robust balance sheet and exciting M&A outlook should prove TNB attractive. Valuations remain compelling at 10.7x FY18F PER with a decent dividend yield of 4.8-5.3% for FY18-20F.



Others :

Public Bank : Moderation in loan growth but overall still stable                    BUY




Gent Singapore : Implications of MBS 3QFY17 results                                      SELL




Rev Asia, Kronologi Asia, Excel Force MSC, Dutaland




Cocoaland : Slapped with additional tax, penalty of RM5.9mil

WZ Satu  : Proposes 1-for-3 bonus issue to reward shareholders

TMC : In high growth phase, eyes 1,100 beds

REIT : REIT Index will help spur more offerings





The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd. Bhd may from time to time have a position in or with the securities mentioned herein. Members of the AmBank Group Bhd and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgment as of this date and are subject to change without notice.





















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