QUOTE(statikinetic @ Jan 19 2021, 03:08 PM)
Quoting the folks who are in the TNB discussion only for ease of reference.
Let me throw in a little extra.
The monopoly part. Which can quickly be the reason to justify certain arguments.
A monopoly is protected from going out of business mostly. It is not protected against share price erosion.
Which brings me to the dividend part. How much of a dividend is justified if you give up capital depreciation?
So we look at the fundamentals if the earnings support the current price.
Tenaga's net profits are about RM 1 bil per quarter, or just above. Share price right now is just above 10.00.
Assuming net profits recover and bounce between 1 - 2 bil every quarter, what is a fair price?
That's easy. We have to go back to 2013 to see Tenaga's profits being at this level. Share price RM 8.00+. It topped out at RM 9 at year end.
On the flip side, there is a LOT more money in the market now which could justify a price premium.
Again, how big of a price premium is too big?
Thanks for doing the “dirty” work of calculation for us haha..
I’ll take your calculation for it, assuming they’re about right. If we compare current FY profit vs that in 2013, the value of 1-2 bil was much larger than now. Over the course of 7 years, if the profit is pulled down to 2013 level, it actually reflects quite badly on the company, as the value of 1-2b is much smaller today.
That being said, the share price should worth more than 8-9,excluding the massive hot money inflow that may, in your words, further pump up the number.
Just my 2 cents hehe..