blardy eell

No chance for TST contract to be terminated

Oil price is creeping up slowly but surely

E.A. Technique’s (EAT) 2QFY20 top line grew by 41.4% YoY, mainly attributed to higher recognition from the Group’s Temporary Storage Tanker (TST) contract which commenced operation in February this year. Nonetheless, core net profit slipped 16.1% YoY to RM8.8m due to enforcement of Movement Control Order (MCO), resulting in a significant disruption to its operations. For 1HFY20, the Group reported core net profit of RM22.7m ( 34.6% YTD), in tandem with higher revenue of RM181.5m ( 36.7% YTD) on the back of stronger 1QFY20 numbers. While core earnings were at 66.8% of our full year projections, we deem the numbers as in line however. We err on the side of caution over its earnings in the remaining quarters, considering the operating environment after the Covid-19 and the level of oil prices currently with earnings likely be affected as a result of fewer spot charters and adjustment on charter prices. We maintain our Outperform call on EAT nonetheless in view of its stable earnings outlook despite recent hiccups. Our TP of RM0.47 based on 8x FY21 EPS.

Lower QoQ earnings due to MCO. EAT reported lower core net profit of RM8.8m (-37.1% QoQ) in 2QFY20 despite of higher revenue by 7% QoQ to RM93.8m. This was mainly due to enforcement of the MCO starting mid March, resulting in a significant disruption to its operations particularly on the movement of crew as well as additional costs incurred due to Covid-19. With that, the Group’s profit margins compressed by 11ppt and 6.6ppt at gross and net profit levels respectively. Higher top line in the quarter was not a surprise given the first full contribution from the Group’s TST contract.
Earnings forecast unchanged. Despite the commendable 1HFY20 performance, we err on the side of caution on EAT’s 2HFY20 earnings given the impact of low crude oil prices due to the Covid-19 pandemic. The Group’s earnings are likely to be affected as a result of fewer spot charters, lower charter rates and possible termination of contracts. Recall, global oil majors including Petronas have announced capex cuts ranging from 20% - 30% this year. As such, we foresee there are charter rate adjustment risks on EAT’s FSO Muar and Tembikai. We also foresee there is risk for TST contract to be ended earlier than the original due date (January 2021) given the role of the TST itself as a temporary storage for Early Well Test (EWT) for the Sepat C exploration field.

Having said that, EAT’s earnings outlook is expected to remain stable with growth seen in FY21 onwards after commencement of the three new tanker contracts. Outstanding orderbook remains healthy at RM910.9m, translating to 3.3x FY19 revenue.
Source: PublicInvest Research - 1 Sept 2020

Back up kuat. Khazanah and EPF

Great feedback and sharing.

Even MD/ceo accumulating shares...buy in confidence

GENERATION spin off will unlock value to shareholder...tenaga downplaying it because this is still highly confidential. Someone leak it

secured 20000 units @0.31..check out my portfolio

Q 20000units@0.31 today

@dompeilee - let profit run

Md/ceo Amir Hamzah last week pick up some more shares 10000 unit beforw this news release

Tenaga has been reported to consider listing its GenCo in 2021, post completion of the group’s corporate restructuring business. We are neutral on the exercise as the listing will not have any material fundamental impact to the group. Nevertheless, it will allow Tenaga to improve its segmental business focus as well as reporting transparency. We estimated the potential market valuation of GenCo to be up to RM13bn (based on c. RM1bn profit and 13x PER). Maintain BUY recommendation with unchanged TP: RM12.50 (based on DCFE) for its stable cash flow and dividend yield.

NEWSBREAK

According to Bloomberg, Tenaga is considering listing its power generation business GenCo on Bursa in 2021, following completion of its on-going corporate re-structuring exercise. Upon listing, investors would be given shares in the unit in proportion to their existing holdings in Tenaga.

HLIB’s VIEW

Neutral impact to Tenaga. As anticipated, we do not discount the possibility of Tenaga listing its GenCo subsidiary post corporate exercise, allowing Tenaga to improve its segmental business focus in anticipation of the on-going industry transformation and potentially allow Tenaga to raise new capital for GenCo. The listing exercise will also allow better reporting transparency. However, we do not expect material fundamental changes to Tenaga’s business outlook. Based on back of the envelop calculations, the expected net profit of GenCo is c.RM1bn with potential market valuation of up to RM13bn upon listing (based on current 13x PE similar to Malakoff).

Maintain BUY, TP: RM12.50. We maintain BUY recommendation on Tenaga with unchanged DCFE-derived TP: RM12.50. Tenaga’s earnings and cash flow are expected to be stable under the IBR/ICPT mechanism. Dividend is expected to remain stable at 50-60sen/share.

Source: Hong Leong Investment Bank Research - 10 Nov 2020

Tenaga is a must have dividend stock

Buy some more .. still cheap current price

Stay invested if you have the staying power

Preparing for Petronas to buy over tenaga shares cheaply - hehehe

TNB granted leave by court to challenge IRB tax bill of RM1.8billion

Seems lile Tenaga will benefit from economic recovery from their monthly data of increasing energy consumption since June

22 sens interim divided 2020 announce in last quarter report

Long weekend

True

Call your broker to sell the odd lot.

Warren buffet exit airline.. what are you guys doing here

Good luck tradiing..company sarung tangan dan condom lagi valuable dari Tenaga Nasional...hahahaha

Yup boleh slow talk.

Buy when fearful, Sell when greedy

Tenaga cash pile 16 billion is sooo good

Thank you for your feedback. I still do some occassional trading especially volume counter like myeg but yes now focusing on tenaga for dividend income. Will continue to accumulate tenaga as the anchor stock. Dividend per unit is expected to continue to be a pull factor for me at 50-60 cents per unit

@ruby20 pengerang petrochemical plant is down until end of the year..no production as no customers orders..still think doing well?

Roads in klang valley now jam as usual indicating usage of electricty by industry/manufacturing is back to normal now pre Covid 19 period. Keerhing for Tenaga

Yes bail out bail out

Apa sudah jadi . Harga saham naik

haha

World class company doing world class initiative

When you buy and sell...you are a trader regardless on how long you keep the stock No difference.

i got the divided back on the 16th April

betul laaa

wow big move

Yeah better cabut

stockraider...why new zealand has less death than singapore?

Tenaga claiming Force Majuere is good for their pocket. good to collect

yes buy without a doubt

oh look tenaga shares still recovering despite ex dividend date!

why need to sell...reinvest the dividend to buy more

see already 1500 cases infected..2-3k coming

When that happens AZRB will be on sale again

Company directors greed knows no bounds.. keep on buying shares to accumulate in the hope it will shore up the stock price. Next week will be volatile as Covid 19 will start to treble to 2-3k infected

i think kerajaaan is doing a good job. i love the kerajaan for reviewing and re-introducing the stimulus measure to make it more relevant and to consider introducing GST. I love GST

Congratulations. We know you will do a good job