Published: Tuesday July 10, 2012 MYT 8:25:00 AM
CIMB Research maintains Gas Malaysia target price at RM2.84
KUALA LUMPUR: CIMB Equities Research is maintaining its target price of RM2.84 for Gas Malaysia with its Outperform recommendation.
It said on Tuesday Gas Malaysia is confident of securing 100% of its new natural gas supply (40 mmscfd) by end-2012.
“Pre-gas service agreements (GSA) for two-thirds of this amount have been signed and the new customers are comfortable paying market prices for natural gas,” it said.
CIMB Research described this is a strong signal that despite a two-fold jump in selling prices, pent-up demand remains strong and the economics is still favourable for industrial activity in Malaysia.
“Gas Malaysia remains an Outperform with an unchanged DDM target price (6% discount rate and 2% TGR). There are no changes to our earnings forecasts,” said the research house.