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2. energy
3. electricity

01 April 2015 | Corporate Update
Tenaga Nasional Berhad
Maintain BUY
A welcome end to the battle for Integrax
Unchanged Target Price (TP): RM17.20
INVESTMENT HIGHLIGHTS
• Local dailies reported that Integrax’s second largest shareholder,
Amin Halim Rasip has accepted TNB’s offer price of RM3.25 per
RETURN STATS
Price (31 March 2015)
14.36
Target Price
17.20
Monday. With Amin’s accepting the offer, TNB’s shareholding of
Expected Share Price
Return
19.8%
Intergrax will surpass the 75% mark in which it will unable to fulfil
Expected Dividend Yield
2.6%
Expected Total Return
22.4%
share.
• This comes after TNB’s general offer turned unconditional last
the public shareholding spread requirement. TNB does not intend
to maintain Integrax’s listing status. Also, we believe that the rest
of the minority shareholders will follow suit and accept the offer
by TNB.
• The acquisition is seen as a strategic move by TNB to ensure the
security of coal supply to its Manjung power plants. Maintain our
BUY call on TNB with an unchanged DCF-derived TP of RM17.20
STOCK INFO
KLCI
Bursa / Bloomberg
Board / Sector
End of a battle. It was reported that Intergrax’s second largest
shareholder is finally accepting TNB’s revised offer of RM3.25 per share.
1,830.78
5347 / TNB MK
Main / Power
Syariah Compliant
Yes
Issued shares (mil)
5,643.6
Recap that TNB had earlier revised the offer price from RM2.75 to
RM3.25 to entice Perak Corp to accept its offer.
Par Value (RM)
Market cap. (RM’m)
Our views. The acquisition is seen as a strategic move by TNB to
Price over NTA
safeguard the supply chain of its coal-fired power plant operation in
1.00
81,042.3
1.78x
52-wk price Range
RM11.22–
RM16.96
are fairly positive on this move. We believe that with majority control of
Beta (against KLCI)
1.13x
the company, it will be able to steer Integrax’s business direction in line
3-mth Avg Daily Vol
14.05m
Manjung, Perak. While we think that the price tag is on the high side, we
with TNB’s operational requirements. We view that stable coal supply is
3-mth Avg Daily Value
RM202.52m
an important element to TNB’s Manjung power plants. This is particularly
so as the power complex will contribute up to 18.4% of peninsula’s power
Major Shareholders
generation capacity when Manjung 4 and Manjung 5 start operation in
Khazanah
29.7%
2015 and 2017 respectively.
EPF
14.5%
Reaffirm BUY with an unchanged TP of RM17.20. We are positive on
Skim Amanah Saham
Bumiputera
7.8%
TNB’s long term prospects due to Government’s commitment with regard
to the full implementation of FCPT. The full implementation of FCPT will
provide stability to TNB’s long term earnings. As such, we are maintaining
our BUY call on TNB with a TP of RM17.20 (WACC: 7.8%, terminal
growth: 2.8%) which implies 15x FY15 P/E and 14x FY16 P/E.
KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES
MIDF EQUITY BEAT
Wednesday, 01 April 2015
Table 1: Investment Statistics
FYE 31 August
(Rm'm, unless otherwise stated)
Revenue
EBITDA
Pretax Profit
Core profit
Core EPS (sen)
PER (x)
Dividend (sen)
Dividend yield @ RM14.36
FY14
FY15f
FY16f
FY17f
42,792.4
12,053.5
4,801.3
5,347.7
94.8
44,522.9
13,460.2
7,547.6
6,601.7
117.0
46,291.2
13,700.9
7,803.4
6,826.8
121.0
48,801.0
14,224.4
8,218.7
7,192.3
127.4
15.3
29.0
2.0
12.4
35.8
2.5
12.0
37.0
2.6
11.4
39.0
2.7
Source: TNB, Forecasts by MIDFR
Table 2: Details of shareholder’s acceptance as at 30 March 2015
Number of
Integrax Shares
(1)
%
Integrax Shares held by the Offeror as at the posting of the Offer Document on 30
January 2015 (“Posting Date”)
66,538,269
22.12
Integrax Shares for which acceptances of the Revised Offer (which are complete
and valid in all respects) have been received after the Posting Date up to 5.00 p.m.
(Malaysian time) on 30 March 2015
67,473,617
22.43
Integrax Shares acquired or agreed to be acquired (other than the Integrax Shares
for which acceptances of the Offer have been received) by the Offeror after the
Posting Date up to 5.00 p.m. (Malaysian time) on 30 March 2015
18,867,600
6.27
152,879,486
50.82
19,029,713
6.33
Integrax Shares which have been transferred into the Offeror’s Central Depository
Securities account up to 5.00 p.m. (Malaysian time) on 30 March 2015 for which
the acceptance forms have yet to be received or verified
(1)
Based on issued and paid-up share capital of Integrax of 300,805,917 Integrax Shares as at 30 March 2015.
DAILY PRICE CHART
Izzat Esa
muhammad.izzat@midf.com.my
03-2772 1679
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MIDF EQUITY BEAT
Wednesday, 01 April 2015
MIDF RESEARCH is part of MIDF Amanah Investment Bank Berhad (23878 - X).
(Bank Pelaburan)
(A Participating Organisation of Bursa Malaysia Securities Berhad)
DISCLOSURES AND DISCLAIMER
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distribution only under such circumstances as may be permitted by applicable law.
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implied, as to the accuracy, completeness or reliability of the information contained therein and it should
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This report is not, and should not be construed as, an offer to buy or sell any securities or other financial
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could result in materially different results. All opinions and estimates are subject to change without
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MIDF AMANAH INVESTMENT BANK : GUIDE TO RECOMMENDATIONS
STOCK RECOMMENDATIONS
BUY
TRADING BUY
NEUTRAL
SELL
TRADING SELL
Total return is expected to be >15% over the next 12 months.
Stock price is expected to rise by >15% within 3-months after a Trading Buy rating has been
assigned due to positive newsflow.
Total return is expected to be between -15% and +15% over the next 12 months.
Total return is expected, by -15% or more, over the next 12 months.
Stock price is expected to fall by >15% within 3-months after a Trading Sell rating has been
assigned due to negative newsflow.
SECTOR RECOMMENDATIONS
POSITIVE
The sector is expected to outperform the overall market over the next 12 months.
NEUTRAL
The sector is to perform in line with the overall market over the next 12 months.
NEGATIVE
The sector is expected to underperform the overall market over the next 12 months.
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