KUALA LUMPUR (Sept 1): Tenaga Nasional Bhd (KL:TENAGA) extended its slide on Tuesday, with shares hitting a six-month low.
The counter fell 38 sen or 2.69% to RM13.76, its lowest since March 9 and giving the group a market capitalisation of RM80.21 billion.
The decline marked the third consecutive trading day of losses for Tenaga shares following the utility giant’s latest earnings, which came in below market expectations.
All 22 analysts tracked by Bloomberg remained bullish on the stock, with 21 recommending 'buy' and one 'hold'. None had a 'sell' call. The 12-month consensus target price was RM16.66.
Power demand in Peninsular Malaysia remains strong as more data centres move into commercial operations, while another 5GW of data centre capacity could be approved by 2027, Hong Leong Investment Bank (HLIB) said in a note on Tuesday.
Tenaga is also poised to benefit from the commissioning of several major power generation projects, and could be shortlisted for the Energy Commission’s latest NewGen26 tender, the research house said.
“We believe the recent share price sell-down presents an attractive opportunity to accumulate,” HLIB said in the note, maintaining its 'buy' recommendation on Tenaga with a target price of RM18.15.
Meanwhile, RHB Investment Bank in a separate note on Tuesday said that Tenaga has submitted a bid to build a 700MW gas-fired power plant in Connaught Bridge. Assuming it wins the tender, the research house estimates the project could provide a 2% upside to its target price.
Assuming Tenaga maintains an effective tax rate of 23% this year, versus the research house’s current base assumption of 26%, RHB estimates this would provide a 4% upside to its target price of RM16.50.