Tenaga: A slight dip in earning

Result Update

For QE31/8/2014, Tenaga's net profit increased by 5-fold y-o-y but dropped by 24% q-o-q to RM1.36 billion while revenue increased by 2% q-o-q or 23% y-o-y to RM11.72 billion. Revenue increased by RM589.9 million or 5.6% q-o-q as a direct result of the increase in the units sold of 4.6% in the Peninsula and 1.5% in Sabah. Net profit dropped q-o-q  mainly due to adjustment on revision of tax assessment during the quarter.


Table 1: Tenaga's last 8 quarterly results


Chart 1: Tenaga's last 27 quarterly results

Valuation

Tenaga (closed at RM13.50 yesterday) is now trading at a PE of 12 times (based on last 4 quarters' EPS of 115 sen). At this PE, Tenaga is deemed attractive.

Technical Outlook

Tenaga is in an uptrend line. It recently broke above the RM12.50 resistance.Its immediate resistance is likely to be the psychological RM15 mark.


Chart 3: Tenaga's weekly chart as at Nov 4, 2014 (Source: Tradesignum)

Conclusion

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.

Note:
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.