Affin Daily Insight (LV) - 29 April 2014 - GASMSIA / DMR

Top Calls

Company Update � Gas Malaysia (REDUCE, maintain) - Margins preserved for FY14 Effective 1 May 2014, the industrial gas prices will rise by 20.2% (from RM16.07/mmbtu to RM19.32/mmbtu). At the same time, the purchase price of gas that GMB procures from PETRONAS will be adjusted upward to RM17.30/mmbtu (domestic gas price fixed at RM15.55/mmmbtu; LNG fixed at RM44.878/mmbtu). Importantly, GMB�s profit margin of RM2/mmbtu is maintained. Thus, it appears the recent change in ASP and gas purchase prices will not change earnings in a material manner in the near term. All in, we maintain our 3-year (FY13-16) EPS CAGR of 8% as our model assumes a 154.8 trillion btu gas �stock� volume for FY14 (implied gas volume growth of 6.5% for FY14) and stable RM2/mmbtu margins. Maintain REDUCE with a DDM-based TP of RM3.35/share (discount rate of 8%, growth rate of 3%).

Other Calls

Debt Market Research - Volume moderates, focus on 7yr ahead of 5yr benchmark auction

Morning News & Market Summary

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