TA Securities kept its hold call for state power firm Tenaga Nasional following concerns from the resignation of chief financial officer (CFO) Rafique Merican, which comes before chief executive officer Che Khalib’s expected departure in June.
TA said in a research note that concerns have arisen as both officials have been the main faces of Tenaga. Rafique is joining Maybank as CFO.
“This may risk delay in tackling some key issues, such as the gas supply issue [including the cost sharing factor when the Malacca regasification plant comes on stream], and the renegotiation of power purchase agreements which are currently ongoing,” the broker said.
TA also kept its target price on the stock at RM7.05 per share.
TA kept its earnings forecasts with upside risks from stronger than expected electricity demand, but said it will review its estimates after the release of Tenaga’s 2012 second quarter results on April 12.
Kenanga keeps outperform call on Tenaga
Kenanga Research kept its call on Malaysia’s power firm Tenaga Nasional to outperform today on the back of lowered fuel costs and possible tariff revisions after the country’s general election widely expected for this year.
“We are banking on meaningful tariff revisions post-general election, since neither Tenaga nor the government can continue to bear the heavy fuel subsidy burdens,” said the broker in a research note today.
Kenanga also said it expects Tenaga’s core earnings to surge as much as 138% quarter-on-quarter due to better gas supply, lower coal cost, high hydropower usage and manageable demand.
A possible Indonesia export tax on coal is unlikely to affect Tenaga’s 2012 full-year earnings guidance as coal prices fall, Kenanga added.
Kenanga kept its target price for Tenaga at RM7.31 per share. Tenaga shares dropped 0.9% to RM6.43.
Maybank cuts Hartalega to hold
Maybank Research downgraded Malaysian glovemaker Hartalega Holdings Bhd today to hold due to bleak sales forecasts for the world’s largest nitrile glove manufacturer in the next two years even though it announced aggressive expansion plans.
Hartalega on Friday announced plans to build a RM1.5 billion glove making facility that will house 70 new high-tech production lines with a total annual capacity of 24.5 billion gloves.
“We lower our FY13-14 earning per share forecasts by 7% ercent per annum on 3% lower sales volume estimates,” said the broker in a research note to clients.
Maybank also cut the firm’s stock target price to RM8.50 from RM9.20.
As of 0148 GMT, shares in Hartalega rose 1.27%, outperforming the Malaysian stock exchange index, which dropped 0.44%.