CIMB keeps "Buy" call on TNB, RM15.90 target
KUALA LUMPUR: Tenaga Nasional Bhd (TNB) has guided for a high single-digit equity internal rate of return (IRR) on its hybrid hydro floating solar at Tasik Kenyir after taking into account higher capital expenditure of between 10 and 15 per cent on the project.
Kuala Lumpur: Tenaga Nasional Bhd (TNB) has anticipated a modest equity internal rate of return (IRR) for its hybrid hydro floating solar project at Tasik Kenyir, accounting for an increase in capital expenditure of 10 to 15 percent. The solar plant, benefiting from the lake's cooling effect, zero land clearing, and avoidance of 650,000 tonnes of annual carbon dioxide emissions, covers only 1.4 percent of the lake's surface and is expected to have minimal impact on biodiversity.
Meanwhile, TNB's Sungai Perak Hydro Life Extension Programme aims to rehabilitate and upgrade the firm's ageing hydroelectric plant, covering five stations with a combined capacity of 648 megawatts, with 36 percent progress achieved by June and commissioning scheduled in phases between 2026 and 2033. CIMB Securities has maintained its "Buy" rating on TNB with an unaltered target price of RM15.90, retaining earnings per share forecasts for FY26 through FY28, as the firm expects the initiatives to deliver a notable earnings boost over the next three years.
CIMB Securities views both projects positively, as they align with the National Energy Transition Roadmap aiming for 70 percent renewable energy capacity by 2050 and could enhance TNB's ESG ratings.
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