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Tenaga Nasional Bhd

Recommendation: BUY
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Target Price: RM10.30

Current Price:c
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Tenaga Nasional Berhad or ƏTENAGAƐ in First Half of the 2010 earnings per share is
better-than-expected at 39.33 sen, representing 63.6% of our forecast and 62.9% of
consensus forecast. In second Quarter of 2010, the Company recorded revenue of
RM7389.1m (up 0.7% q uarter-over-quarter and 7.0% year-over-year)
and operating profit of RM1320.6m (up 6.4% q uarter-over-quarter and 13.8% year-
over-year) in Second Quarter of 2010. Meanwhile in First Half of 2010, net profit
excluding Forex gain is at RM1598.5m, representing 59.6% of our forecast.
On the back of expected higher electricity demand in FY2010 and lower coal price risk
(due to stronger ringgit), we maintain our BUY recommendation with upgraded target
price of RM10.30 (previous: RM9.22).

The above table demonstrate some useful financial information about the Tenaga
Nasional Berhad which will be discussed one by one in the following paper to understand
why we have to buy this share, in april 2010 (when this information and recommendation
released) and at the end we will show another table about the price for this stock in
14,02,2011.
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We are going to:
Make a comparison between different ratio in above table between FY09 and FY10:
ÿt can be seen in the following table, revenue in FY09 compare to the FY10, because of the
stated reasons in the following paper has been increased, however, operating expense a little
bit has been increased, but there is a jump in one of the profitability index (EBÿ
from
3698.90 to 5497.27.

Moreover, in year over year (FY09 compare to FY10
profit before tax (PB
has
experienced a significant increase from 1543.10 to 4393.23 which is a good news, because
one of the profitability index has been raised and as a consequence EBÿ  has been
increased,

Besides, there is a dramatic increase in Net Profit to Equity Holders from 917.90 to 3261.98
,in addition to a remarkably surge in Earning per share (EPS
for every share holder, that¶s a
good point for us ,because one of our interest is increasing the EPS, which has been raised
from 21.18 to 75.12 during one year.

Moreover, the entire profitability index in terms of the Profitability margin, Profit before tax
and net profit margin has been experienced a growth and it shows again that¶s a good
opportunity for us to buy the share because it will be reached to RM10.30 from RM8.50

Besides there is another table for comparing the quarter over quarter and year over year about
performance of this company regarding to change the some important ratio that will be
discussed in the underlying explanation.

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ÿt was demonstrated in the above graph and table which is related to (Fri, Feb 14, 2011,
4:55PM ES
from Yahoo finance in this update table can be seen the share price is RM
6.14,it means the price compare to target price, RM 10.30 in last year (pril 2010
when the
report was issued also has been decreased. Maybe some other factors change this trend and
make it to reduce.