KUALA LUMPUR: Hong Leong Investment Bank (HLIB) maintained a 'buy' call ON Tenaga Nasional Bhd
(TNB), following the company's strong third quarter 2015 core earnings of RM1.5bil.
"The positive results were 74.4% higher than our forecast and 76.2% of consensus," HLIB said in a note.
According to the investment bank, the implementation of TNB's incentive-based regulation and fuel cost pass-through mechanism would eliminate uncertainties about its future earnings.
"The management also foresees no issue on the potential delay in the Track 4A project at Pasir Gudang, given the slower-than-expected power demand growth, likely due to slow down in economy," it said.
Meanwhile, on the 1MDB-EDRA Global Energy Bhd, HLIB believed that TNB was unlikely to buy the company at high valuation.
HLIB has set a target price of RM17 for TNB.
At 10.51am TNB's share price was four sen lower at RM12.08 with 2.37 million shares changing hands. - Bernama
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