Gas Malaysia a 'growing cash cow'

Publish date: Fri, 14 Sep 2012, 09:51 AM
Kenanga Investment Bank started coverage on Gas Malaysia Bhd with an "outperform", saying the company is a "growing cash cow" thanks to future earnings growth and generous dividend payout.

Kenanga set a target price of RM2.94 on Gas Malaysia shares. The stock rose 0.4 percent to RM2.62 on Friday.

Kenanga said an expected fall in Gas Malaysia's earning in FY 2012 is expected to be limited as the firm has signed additional gas supply deal with state oil firm Petronas , potentially boosting 2013-15 earnings.

Gas Malaysia is the only firm licensed to supply and sell natural gas in mainland Malaysia where demand has been steadily growing.

"The company has committed to a 100 percent payout of its FY12 earnings and 75 percent for each year for FY13-FY14," Kenanga said in a note to clients.

"We see little problem for Gas Malaysia not to pay such a generous dividend given its relatively low capex requirement and sustainable earnings quality." -- REUTERS

Labels: GASMSIA

Discussions
Be the first to like this. Showing 3 of 3 comments

Raymond Tiruchelvam

i wonder whats the foreign shareholding percentage in gas malaysia? basically it buys natural gas from petronas super cheap and sells to industries cheap.... 100% make money lah, who does not know that.... how long can sustain, only God knows

2012-09-18 18:26

King Kong73

cheap gas price is going to be over soon. bro raymond...gas price is going to go up ..that is why petronas gas have RGT terminal being built to convert imported liquified gas into natural gas..once they have finished building the 2nd and 3rd RGT terminal in Johor and Sabah..price of gas in malaysia will more or less reflect the market rate comparable to what other South East Asia countries are paying...part of the deal with the government so that petronas gas can increase their gas price. Petronas gas is a buy

2012-09-18 18:35

King Kong73

gas malaysia is a buy too

2012-09-18 18:36

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