TNB will release its 2QFY10 results on 20 Apr. We estimate 2Q core net profit could be up by low-mid single digit qoq and flat yoy, which would bring 1H core net profit to around 52-53% of our revised FY10 net profit forecast and around 51-52% of consensus estimates.
♦ Overall, 2Q unit sales were up 13.8% yoy with the industrial/commercial/domestic segments reporting growth of +20.1%/+9.9%/+7.5% yoy respectively. Hence, we estimate that 2QFY10 revenue could rise by around 6-7% yoy but could stay flat qoq.
♦ YoY bottomline growth, however, would be dragged by:
1) generation mix;
2) higher capacity payments; and
3) higher effective tax rate.
♦ QoQ, the better net profit performance expected would be due to the absence of the RM94m provision for unutilised staff leave in 1QFY10, partly offset by higher coal costs.
♦ We expect TNB to declare an interim gross DPS of 10 sen (2QFY09: total gross DPS of 4.7 sen).
♦ We have raised our FY10 electricity demand growth assumption to +5.5% (+3.8% previously) while for FY11 and FY12, we have assumed annual electricity demand growth of +5% (from +4.5%). Overall, we have raised our FY10-12 net profit projections by 3.8-5.5%
♦ Fair value raised to RM9.90 (from RM9.50) based on unchanged target CY10 PER of 14x.
RHB Equity 360° (TNB, Sime Darby; Technical: MAS, AirAsia)
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