Friday, July 19, 2013

Tenaga- all engines firing up!

Result Update

For QE31/5/2013, Tenaga's net profit increased 34% q-o-q or 154% y-o-y to RM1.71 billion while revenue increased by 9% q-o-q or 5% y-o-y to RM9.65 billion. The improved bottom-line was attributable to increased top-line (due to higher sales of electricity in Pen. Malaysia & Sabah of 2.3% & 1.0% respectively).

Table 1: Tenaga's last 8 quarterly results

Chart 1: Tenaga's last 22 quarterly results


Tenaga (closed at RM9.01 yesterday) is now trading at a PE of 98 times (based on last 4 quarters' EPS of 98 sen). At this PE, Tenaga is deemed very attractive.

Technical Outlook

Tenaga is in an intermediate uptrend. It broke above its horizontal lines at RM7.00 in April & RM8.60 in late May. Yesterday, it broke above the psychological RM9.00 level. It is poised to test its 2007 high of RM9.30. I am optimistic that Tenaga can surpass this level after the Government has agreed that it can "begin implementing the fuel cost pass-through (FCPT)mechanism, entailing higher tariffs for consumers".

Chart 2: Tenaga's daily chart as at July 18, 2013 (Source: Quickcharts)

Chart 3: Tenaga's weekly chart as at July 18, 2013 (Source: Quickcharts)

Chart 4: Tenaga's monthly chart as at July 18, 2013 (Source: Quickcharts)


Based on improved financial performance, fairly attractive valuation, favorable regulatory regime & technical outlook, Tenaga is a good stock for investment- whether medium or long-term. It could be a trading BUY with the breakout above the psychological RM9.00 yesterday. 

In addition to the disclaimer in the preamble to my blog, I hereby confirm that I do not have any relevant interest in, or any interest in the acquisition or disposal of, Tenaga.

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