Tenaga- a quicktake

Tenaga share price has suffered badly from the fear that it might not be able to pass on recent cost increases to the consumers in the form of higher tariff rates. As a result, the share price has dropped sharply & broke below its strong horizontal support at RM6.80 (making a low of RM6.60 on March 13th). Yesterday, the stock rebounded to close at RM7.35.

From the monthly chart below, we can that Tenaga has strong horizontal support at RM6.80-7.00, with next support at RM6.00. On the upside, Tenaga would encounter resistance at RM7.80-800 and thereafter at RM9.00-20.

For the 1Q2008 (i.e. QE30/11/2007), Tenaga reported a net profit of RM1.52 billion on a turnover of RM6.21 billion. For FYE31/8/2007, Tenaga reported a net profit of RM4.06 billion on a turnover of RM23.23 billion.

Based on yesterday's closing price of RM7.35, Tenaga is now trading at a PE of 7.7 times (using its 2007 EPS of 94.9 sen) or at a P/Book of 1.25 times (using its NTA per share of RM5.90 as at 30/11/2008). For a blue-chip utilities stock, Tenaga is fairly attractive.

I believe that Tenaga could be a good BUY for long-term investment. Try buying this stock at RM7.00 level.


Chart: Tenaga's monthly chart as at March 25, 2008 (courtesy of Quickcharts)