Tenaga Nasional Bhd, or TNB, is the largest electric utility company in Malaysia. The company is involved in the generation, transmission, distribution, and sale of electricity. TNB segments its operations into a generation division, a transmission division, and a distribution division. The generation division encompasses the company’s portfolio of thermal and hydroelectric power plants located throughout Malaysia.
Through its subsidiaries, TNB also engages in other energy-related operations, such as the manufacturing of transformers and the providing of consulting services. The company primarily generates revenue through the sale of electricity in West Malaysia. Its customers are mainly commercial operations, domestic consumers, and large industrial entities.
Earning
TENAGA’s earnings certainty expected to remain high. In its recent quarterly 3QFY20 results, TENAGA continued to post disappointing results with core profit falling 31% YoY to RM903.0m as the COVID-19 impact on non-regulated business persisted.
However, the COVID-19 impact on its non-regulated business plus sales discount and contribution was reduced to a smaller quantum of RM425.8m in 3QFY20 from RM703.8m in the preceding quarter. In these uncertain times, the Utilities sector is a good investment avenue given their earnings defensiveness.
Future Outlook
There can be no doubt that our industry is on the cusp of an exciting period of innovation and technological change. Digitalisation and green technologies will create new possibilities for electric utilities to deliver our products and services in a clean, reliable, and affordable fashion, and to afford our customers greater choice and control over the way they use electricity.
We believe, moving forward, that we will see increasing synergies between innovative digital technologies from beyond the utility industry merge with increased adoption of RE to create new and exciting sustainable possibilities. We are excited to be a part of the Nation’s journey towards what we envision as a brighter future and look forward to contributing in any way we can to restructure the industry to ensure its sustainability and, by extension, the sustainability of all stakeholders concerned.
We are excited to be part of the Nation’s journey towards what we envision as a brighter future
TAN SRI AHMAD BADRI MOHD ZAHIR | Chairman
Valuation
| Date | Target Price | Price Call | Source |
|---|---|---|---|
| 08/01/2021 | 12.20 | BUY | MACQUARIE GROUP |
| 05/01/2021 | 12.40 | BUY | KENANGA |
| 04/01/2021 | 12.42 | BUY | PUBLIC BANK |
| 04/01/2021 | 12.40 | BUY | KENANGA |
| 04/01/2021 | 13.95 | BUY | AmInvest |
Chart Study
Top 10 Investors
| INVESTOR NAME | % O/S | POSITION (M Shares) | POSITION CHG (M) | VALUE(M USD) | FILING DATE |
| Khazanah Nasional Berhad | 25.69 | 1,465.43 | -85 | 4,059.99 | 24-Apr-20 |
| Employees Provident Fund Board | 17.47 | 996.55 | 3 | 2,290.31 | 30-Oct-20 |
| Permodalan Nasional Berhad (PNB) | 16.79 | 957.94 | 0.07 | 2,669.71 | 02-Mar-20 |
| Kumpulan Wang Persaraan (Diperbadankan) | 7.13 | 406.59 | 0.71 | 1,117.21 | 11-Nov-20 |
| The Vanguard Group, Inc. | 2.16 | 123.2 | -0.42 | 343.36 | 02-Mar-20 |
| Public Mutual Berhad | 1.97 | 112.15 | 13.79 | 312.55 | 02-Mar-20 |
| Great Eastern Life Assurance (Malaysia) Berhad | 1.68 | 95.92 | 14.83 | 267.33 | 02-Mar-20 |
| Vanguard Total International Stock Index Fund | 1.1 | 62.81 | -4.09 | 158.8 | 30-Sep-20 |
| Eastspring Investments Berhad | 1.03 | 58.95 | 0.02 | 164.3 | 02-Mar-20 |
| AIA Bhd. | 0.87 | 49.65 | 2.13 | 138.37 | 02-Mar-20 |