HwangDBS Vickers Research has maintained its "buy" call on Tenaga Nasional Bhd (TNB) with a RM8.10 target price based on a stronger financial year 2012 forecast (FY12F) earnings.

In a research note today, the research firm expects TNB's base tariff hike to take effect by next year.

It added, TNB would also be getting an additional subsidised gas supply from the new Petronas Gas Liquefied Natural Gas (LNG) plant, which supports the case for a subsidy review and base tariff adjustment.

"We estimate that for every one per cent increase in base tariff, TNB’s FY12F net profit will rise by 8.7 per cent while every one per cent hike in average coal price reduces FY12F net profit by 4.1 per cent," it said.

Meanwhile, the research firm also maintained its "hold" call for YTL Power International Bhd (YTLP) for a sum-of-parts (SOP) derived target price of RM2.75 per share on concerns over its lower internal rate of return from the power purchase agreement (PPA) extension but still with an enhanced value.

"YTLP, which has a 21-year PPA with TNB until 2015, has a positive potential extension for its first generation PPA as a power plant in operation is better than an idle one," it said.

HwangDBS also maintained its "hold" call with a target price of RM11.40 on Petronas Gas Bhd (Petgas), as the owner and operator of the regasification plant in Melaka.

It said, Petgas had a good yield with an upside, from its regasification plant. --Bernama