(TNB MK/BUY/RM14.24/Target: RM16.00)

3QFY17 core net profit (excluding one-off RM150m interest charge and RM300m deferred tax) came in at RM2.18b (-7% yoy; +50% qoq). This brings 9MFY17 core net profit to RM5.6b (-5% yoy), accounting for 74% of our full-year forecast. We expect coal prices to stabilise in 4QFY17 while its effective tax rate stays low, given reinvestment tax allowances that run into FY18. Separately, there is a balance of RM500m savings from the PPA renegotiation for the government to utilise in the next tariff review in the event of an underrecovery. Maintain BUY. Target price: RM16.00.

Source: UOB Kay Hian Research - 28 Jul 2017