THE INVESTMENT APPROACH OF CALVIN TAN

UNDERSTANDING THE UPCOMING ELECTRICITY TARIFF BY TENAGA NATIONAL, Calvin Tan

calvintaneng
Publish date: Sat, 28 Dec 2024, 12:33 PM
calvintaneng
0 1,887
Hi Guys,

I have An Investment Approach I which I would like to all.

Dear Investors & Traders of i3 Forum


There is a lot of confusion regarding the latest TNB announcement of Electricity Tariff


To shed light and give clarity I hope all will see after reading this post


First Refer to Bursa


OTHERS REGULATORY PERIOD 4 IMPLEMENTATION

TENAGA NASIONAL BHD
Type
Announcement
Subject
OTHERS
Description
REGULATORY PERIOD 4 IMPLEMENTATION

Tenaga Nasional Berhad (“TNB”) wishes to inform that the Government of Malaysia (“Government”) has approved the implementation of Regulatory Period 4 (“RP4”) under the Incentive Based Regulation (“IBR”) framework for the period of January 2025 to December 2027. This decision was informed via a letter from Suruhanjaya Tenaga (“ST”) to TNB dated 24 December 2024. The determination process is consistent with methodology and procedures set out under the Regulatory Implementation Guidelines (RIGs) by ST.

The allowed Capital Expenditure (“CAPEX”) is RM42.821 billion which consists of RM26.554 billion base CAPEX and RM16.267 billion contingent CAPEX. The total allowed CAPEX for RP4 is set to bring significant economic benefits towards stimulating the nation’s economy and preparing the electricity network to facilitate the nation's energy transition agenda.

The allowed Operating Expenditure ("OPEX") is RM20.782 billion which support the planning and execution of necessary operational and maintenance activities for all of TNB’s electrical infrastructures. 

The regulatory rate of return has been maintained at 7.3% as per Regulatory Period 3. This will enable TNB to make essential investments in the industry, ensuring a continuous and reliable electricity supply to meet the growing demand of customers.

Generation costs remain the largest component of the electricity tariff, with gas and coal continue to be the primary fuel sources for electricity generation during this period. Any additional generation costs resulting from higher fuel prices for electricity supply will be passed through via the Imbalance Cost Pass-Through ("ICPT") mechanism. TNB remains neutral in this regard and there will be no impact to the Company's business operations or financial position.

The current electricity tariff schedule which has been in place since 2014, will continue to be in effect, with no change in the electricity tariff rate and tariff structure until 30 June 2025. The new tariff schedule with base tariff on 45.62 sen/kWh for RP4 is proposed to be implemented starting 1 July 2025 and any differences from January to June 2025 will be funded through Kumpulan Wang Industri Elektrik ("KWIE").

The Government’s decision to implement RP4 is a testament of the Government’s commitment to the IBR framework, which has been the pillar of sustainability and stability of the electricity supply industry. It provides a transparent regulatory framework, advocates cost efficiencies and ensures financial and operational sustainability of the system and the industry. 

Through RP4 implementation under IBR, TNB commits to ensure a reliable and continuous supply of electricity to our customers, enhance customer service level and facilitate the nation's energy transition agenda. In addition, TNB remains dedicated in supporting the nation through corporate social responsibility initiatives while ensuring a sustainable and resilient electricity system.

This announcement is dated 26 December 2024.


From above please read again


 the Government of Malaysia (“Government”) has approved the implementation of Regulatory Period 4 (“RP4”) under the Incentive Based Regulation (“IBR”) framework for the period of January 2025 to December 2027. This decision was informed via a letter from Suruhanjaya Tenaga (“ST”) to TNB dated 24 December 2024. 


1)  Government of Malaysia (“Government”) has approved the implementation of Regulatory Period 4 (“RP4”) under the Incentive Based Regulation (“IBR”) framework for the period of January 2025 to December 2027.


This has been approved by Government


2)  This decision was informed via a letter from Suruhanjaya Tenaga (“ST”) to TNB dated 24 December 2024. 

Letter has been received by TNB from Suruhanjaya Tenaga


Now who is the Governing Body called "SURUHANJAYA TENAGA"?


https://my.linkedin.com/company/suruhanjaya-tenaga

Suruhanjaya Tenaga (Energy Commission)

Pentadbiran Kerajaan

Towards World Class Energy Regulator By 2026


And so in other words it is ENERGY COMMISSION
Commissioned by Who?

Pentadbiran Kerajaan


Translated it is GOVERNMENT ADMINISTRATION




SO TNB GOT ITS LETTER OFFICIALY FROM THE GOVERNMENT ADMINISTRATION




This is contrary to what naysayers talking without facts or reason as all the details are reported in transparent manner to Bursa


Now we also got these details


Refer to Bursa


OTHERS REGULATORY PERIOD 4 AND IMBALANCE COST PASS-THROUGH ("ICPT") FOR IMPLEMENTATION PERIOD JANUARY-JUNE 2025

TENAGA NASIONAL BHD
Type
Announcement
Subject
OTHERS
Description
REGULATORY PERIOD 4 AND IMBALANCE COST PASS-THROUGH ("ICPT") FOR IMPLEMENTATION PERIOD JANUARY-JUNE 2025

Tenaga Nasional Berhad (“TNB”) wishes to inform that the Government of Malaysia (“Government”) has approved the implementation of the Regulatory Period 4 (“RP4”) under the Incentive Based Regulation (“IBR”) framework for the period of 1 January 2025 to 31 December 2027. This was announced by Ministry of Energy Transition and Water Transformation (“PETRA”) via its press release ‘Pengekalan Tarif Elektrik di Semenanjung : Kerajaan Menyediakan Subsidi Elektrik Sebanyak RM5.96 bilion bagi tempoh 1 Januari hingga 30 Jun 2025’ dated 20 December 2024.

As stated in the press release, there will be no electricity tariff hike to all customers in Peninsular Malaysia for the period from 1 January 2025 to 30 June 2025. The new tariff schedule for the RP4 is proposed to be implemented starting 1 July 2025. Any adjustment in the implementation of the new tariff schedule shall comply with the rules and regulations under the ‘Guidelines on Electricity Tariff Determination Under IBR for Peninsular Malaysia 2021’. 

The Government has also approved the continued implementation of the Imbalance Cost Pass-Through (“ICPT”) mechanism for the period of 1 January 2025 until 30 June 2025. The decision was made to address the additional generation costs due to the higher fuel prices used for the supply of electricity during the period of 1 July 2024 to 31 December 2024.

TNB also wishes to inform that the impact of the ICPT implementation is neutral on TNB and will not have any effect on its business operations and financial position. TNB will continue to focus on maintaining the service level and ensuring reliable and continuous supply of electricity to customers.

Please refer to Suruhanjaya Tenaga's website (http://www.st.gov.my/) for further details on the RP4 and ICPT implementation.

This announcement is dated 23 December 2024.



Read again


Kerajaan Menyediakan Subsidi Elektrik Sebanyak RM5.96 bilion bagi tempoh 1 Januari hingga 30 Jun 2025’ dated 20 December 2024.


Because there is no tariff increase from Jan 1 to 30 June 2025

(for 10 years 2014 to 2024 TNB only imposed same tariff with old prices) so by right after one decade Tariff increase is normal as many things have gone up in prices. We can all witness before Covid 19 & after Covid 19 all our foods & drinks have gone up in prices by 20% to 30%


And some even higher


Eg Teh tarik was Rm1.20. Now Rm2.00 (up by 66%

Chicken rice was Rm5.00. Now Rm8.00 (Up by 60%)

5 Kg Cooking Oil was Rm19.90 & Now Rm30.90 (Up 55%)


Both PBA (Penang) & SAJ RANHILL (Johor) have been given greenlight to increase Water Tariff (with some opposing voices) But it came to pass.


Now for Jan 1 to June 30 2025 Tenaga forgo the right to increase Electricity Tariff (So prices remain cheap at status quo)

But there is a COMPENSATION FROM GOVT


See


Kerajaan Menyediakan Subsidi Elektrik Sebanyak RM5.96 bilion bagi tempoh 1 Januari hingga 30 Jun 2025


RM5.96 BILLIONS CASH WILL COME FROM RAKYAT THRU GOVT SUBSIDY TO TNB AS COMPENSATION FOR NOT RAISING ELECTRICITY PRICES


Now think very very very carefully

Almost RM1 BILLIONS PER MONTH (Burden will be borne by the Collective 33 Millions of Malaysians)

And next 10 years?

RM1 BILLIONS X 12 MONTHS X 10 YEARS

= RM120 BILLIONS

THIS AMOUNT CAN ALREADY COVER COST OF KL-SINGAPORE HIGH SPEED RAIL


Now whether TNB raise Tariff or not is Immaterial as it will get its money either through a Rise in Tariff or from GOVT Spending Rakyat monies collected from Income Tax, Cash Received from PETRONAS & Others.


Now let's see how good and favourable are the Terms given to TNB


Rm1 BILLIONS A MONTH

3 MONTHS (Per Quarter) Means RM3 BILLIONS


Let us study TNB Balance Sheet (Refer Bursa)

SUMMARY OF KEY FINANCIAL INFORMATION

30 Sep 2024


INDIVIDUAL PERIOD
CUMULATIVE PERIOD
CURRENT YEAR QUARTER
PRECEDING YEAR

CORRESPONDING

QUARTER

CURRENT YEAR TO DATE
PRECEDING YEAR

CORRESPONDING

PERIOD

30 Sep 2024
30 Sep 2023
30 Sep 2024
30 Sep 2023
MYR'000
MYR'000
MYR'000
MYR'000
1
Revenue
14,351,600
13,466,100
42,358,800
39,414,900
2
Profit/(loss) before tax
1,875,400
1,055,500
4,672,100
2,699,700
3
Profit/(loss) for the period
1,631,500
877,400
3,821,800
2,079,200
4
Profit/(loss) attributable to ordinary equity holders of the parent
1,584,300
856,200
3,744,100
2,186,400
5
Basic earnings/(loss) per share (Subunit)
27.33
14.85
64.60
37.91
6
Proposed/Declared dividend per share (Subunit)
0.00
0.00
25.00
18.00


AS AT END OF CURRENT QUARTER
AS AT PRECEDING FINANCIAL YEAR END
7
Net assets per share attributable to ordinary equity holders of the parent
10.2003
10.1646


Latest Results show a profit of Rm1.583 BILLIONS or 27.33 sen profit

(Still at Old tariff)


Now one Qtr of 2025 Govt gives TNB Rm3 BILLIONS


the formula is


Rm3,000,000,000 divides by RM1,584,300,000


then multiply by 27.33


= 51.75 sen (HuHuHu!!)


NOW TNB NO NEED TO WORK CAN GET EXTRA 51.75 SEN (FREE SUBSIDY MONEY)

So all you naysayers happily support TNB by telling Govt to stop raising Electricity Tariif?

It only backfires on your naivity & shallow thinking


More So as FOREIGN INVESTORS WILL BE LAUGHING 


Malaysia, by virtue of its Ideal Location with Lots of Water and Low Cost Electricity Have Cause


A MUSHROOMING OF DATA CENTERS LIKE NEVER BEFORE


Let us learn from Nature


In places where there is abundant rainfall & sunlight Vegetation grow profusely


In Tundra where there is little water (lots of ice) with little sunshine only moss and short vegetation can grow

2 to 3 feet height only


In Sub Tropical Climate where there is Mild Sunlight or Water Deciduous Trees are found

These trees shed their leaves in Winter months where there is Less sunlight to conserve energy


In Equatorial Climate like Malaysia we only have EVER GREEN TREES like Palm Oil (Never shed leaves)

And Palm oil needs lots of Sunlight & Water

And in Taman Negara we can see Trees over 150 feet high


So are DATA CENTERS


THEY COME HERE LIKE FOREST GROWN IN TAMAN NEGARA


ALL BECAUSE THEY ARE ASSURED OF ABUNDANT WATER SUPPLY PLUS ELECTRICITY SUPPLY


Now you know Why Ytl Power bought lands from Bplant to do Data Center & Solar Farm

Because Solar Farm can produce Green Solar Energy


Now you also know why Ytl Power wants to take Ranhill private. Lots of Water needed for Data Centers


Now if Tenaga does not raise Electricity Tariff who will build the Electric Grid to connect all the Solar produced?

They must be transported to Data Centers


Why Do Data Centers Want So MUCH ELECTRICITY?


See this


A single data center can consume the equivalent electricity of 50,000 homes. At 200 terawatt hours (TWh) annually, data centers collectively devour more energy than some nation-states.”10 Jan 2024


How much electricity does a data center use?

But large hyperscale data centres, which are increasingly common, have power demands of 100 MW or more, with an annual electricity consumption equivalent to the electricity demand from around 350 000 to 400 000 electric cars. 18 Oct 2024






THERE ARE NOW ALMOST 100 DATA CENTERS IN MALAYSIA. AND MANY MORE BEING BUILT

IF ONE DATA CENTER CAN USE THE EQUIVALENT OF 50,000 HOMES


THEN 5 MILLION HOMES EQUIVALENT  FOR 100 DATA CENTERS


Why they want to Enjoy Cheap Electricity at the Expense of Malaysia Tax Payers?

These are Trillion $$$ Companies like NVIDIA, GOOGLE, MICROSOFT, AMAZON & OTHERS


HOW COME THEY GET RICHER AT THE EXPENSE OF MALAYSIAN RAKYAT?


Perish the thought


Let Tenaga do its Rightful Duty



With Warm Regards


Calvin Tan


Please buy or sell after doing your own due diligence or Consult your Remisier/Fund Manager


Ok let us do a simple projection from revealed figures


Tnb give 51.75 sen per qtr


one year will be


51.75 x 4 qtrs


= Rm2.07


If we assign P/e 10 (or ten times earnings only)


it will be Rm20.70



This prrice does not include what Tnb could earn from operating profits

If added Tnb should be Rm25.00 a share more or less



Discussions
2 people like this. Showing 8 of 8 comments

calvintaneng

TNB also selling Renwable Energy to Spore

Over there also got Data Centers

https://www.datacenters.com/locations/malaysia/johor/kulai

1 month ago

calvintaneng

TNB also selling Renwable Energy to Spore

Over there also got Data Centers

https://www.datacenters.com/locations/malaysia/johor/kulai

1 month ago

Hew Kiong Peng George

Then tenaga market cap will win maybank. If tp rm25 achieved.

1 month ago

calvintaneng

Happy morning

Yes, it looks like Tnb going to play a Major Role while Petronas recedes.

Petros (Owned by Abang Jo's Sarawak Govt) is taking away 30% of Petronas share of profits in Sarawak

As such Petronas will face a diminishing future

While Tnb is expanding its Vast Business Outreach like never before

For now we still fill out gas at petrol stations but in the future with growth of electric cars we will recharge battery at Charging Stations every where

So Petronas being a fuel supplier will decrease while Tnb"s Role as a Electricity provider will increase

In time past horse drawn carriages were made obsolete at the dawn of the Motor Car

So in the 5th Industrial Revolution Electric cars will replace fossil fuel car

Automatic Self Driving Cars will replace Human Driven cars

Robots will take over 40% of Human jobs eventually

Last time human hard labour is in use. In the future no more.
Ai (Artificial Intelligence) will take over

So human energy will be replaced by electrical energy

One Ai needs the energy of many men combined

All these will cause Data Center to consume even more and more electricity like never before

So to prepare ahead Tnb must upgrade its Power Grid.

Tnb overtaking Petronas is not a far fetched dream

1 month ago

calvintaneng

NO

DEEPSEEK NOW ALSO IMPACTED NVIDIA

TENAGA ADA POWER

DEEPSEEK INTO AI GPU IMPACTS ONLY NVIDIA: STAY SAFE IN HDD/SSD, HEALTHCARE, PALM OIL & UTILITY STCKS SAFER, Calvin Tan

https://klse.i3investor.com/web/blog/detail/www.eaglevisioninvest.com/2025-01-28-story-h498585527-DEEPSEEK_INTO_AI_GPU_IMPACTS_ONLY_NVIDIA_STAY_SAFE_IN_HDD_SSD_HEALTHCARE

2 weeks ago

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