Affin Hwang Capital keeps ‘buy’ on Gas Malaysia with RM3.25 target price


KUALA LUMPUR: Gas Malaysia Bhd’s results in the first quarter ended March 31 exceeded Affin Hwang Capital and consensus full-year estimates as margins came as a positive surprise.

The research firm said Gas Malaysia’s revenue fell 28 per cent year-on-year to RM1.1 billion in the first quarter due to the lower gas tariff, which had no impact on margins.

“Gas sales volume, however, rebounded strongly, growing nine per cent year-on-year.

“Core net profit increased 16 per cent year-on-year on the back of better spreads.

“The non-regulated business is showing signs of stability, having reported its third consecutive quarter of profit, which is rather commendable,” it said in a report yesterday.

Affin Hwang Capital raised its earnings forecast on Gas Malaysia by seven per cent to factor in the better margins.

“We reiterate our ‘buy’ rating and raise our dividend discount model derived-target price to RM3.25 from RM3.18 previously.

“Dividend yield at 6.2 per cent is attractive,” it added.

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