Again don't use past data to judge as mentioned in my other posts, as earning of TNB for near future surely will go down because of high fuel price. It is not as cheap as you think aka PER 8x.

Cheers.

This post has been edited by cherroy: Jul 21 2008, 09:05 PM

RM is actually appreciating since 2010.
That's why TNB is able to register hefty paper profit from its foreign currency loan.

As long as RM is having strength against USD, it is a positive for TNB. As USD is always the major currency of foreign loan taken up by most company.

TNB could be not a good choice to hold mainly due to:
1. Increase in electricity tariff is both detrimental to real economy as well as political consideration aka the best interest for the company is a negative effect on economy, and political interest.

Demand surely is increasing over the time but it doesn't mean must translate into better profit in the future, while stock price/valuation is always based on profitability, not about how much the revenue/sales.

Yes, demand is only has one way to go aka up only, but for fuel price, coal price issue, and infrastructure cost associated to meet the demand, we will never know or sure.

If thing is so simple predictable, we won't have people loss money in investment.

Just look back when oil price hit USD140, if one said oil price will drop back to USD 60, one will be seen as making some stupid comment.
It could be the same now, as well, if one said inflation is a threat in current weak/fragile economy, one is being seen as making nonsense comment as well. As currently, a handful of analyst, economists even Fed are worrying about deflation.

Don't get me wrong, I am not saying who is right or wrong about economy issue, just we never can assure.

Who know, there will be new legislation on worldwide coal usage to reduce carbon emmission, which indirectly increase the cost of producing electricity.
Or new legislation, open up the sector and bring in more IPPs whom can supply directly and compete with TNB.

This we will never can assure.

But if TNB is running the most efficiently then we can rougly assure it will register good profit and long term future is somehow quite safe.

So far, TNB is not showing good long term profit to investors even hold it for 10+ years, despite the electricity demand has increase 2x since decade ago.
So increase in demand even for sure, doesn't mean it is good for long term holding.


This post has been edited by cherroy: Jul 18 2010, 04:41 PM