KUALA LUMPUR: Tenaga Nasional Bhd
(TNB) which has been uptrend, climbed to a record high on Tuesday, reaching RM15.84 amid a global equities rally.
The utility giant jumped 14 sen, or 0.89% to RM15.84, giving it a market capitalisation of RM89.74bil. The counter hit a high of RM15.94 earlier. The stock rose 1.9% in the past month.
It is currently trading 12.98 times trailing 12-month earnings per share and 12 times its estimates for the coming year.
In a report dated Jan 2, Kenanga Research said it did not rule out a potential re-rating on TNB although the counter was not a so-called general election (GE) play per se.
“Recall that TNB has been our top pick due to its undemanding valuation of 13 times CY18E PER against FBM KLCI of over 16 times. We reckon that the lagging performance of TNB could be due to the wrong perception of ‘no tariff hike before GE’,” the research house said.
As TNB has adopted an ICPT (Imbalance Cost Pass Through) mechanism, changes in tariff may not have a big impact to their earnings.
“Nonetheless, post-GE, we believe a re-rating is likely as there is less reason for the deep PER discount between TNB and FBM KLCI,” Kenanga said.
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