Mcap Energy | HOLD | Upside 4%
USD1.1b ADTV USD6.5m MK: Gas Malaysia (GMB MK)
- Initiating coverage with a Hold and MYR2.76 DCF TP. Gas Malaysia is the
sole licensed operator and distributor of natural gas in Peninsular Malaysia to customers who consume 5 mmscfd of natural gas and below.
- It operates in a highly regulated environment, is financially cash rich and
could capitalize heads-on from the demand push for natural gas in Malaysia as LNG import kicks-off in 2H12. Nonetheless, we believe that most of the midterm prospects have been priced in.
- Current price implies dividend yield of 4%. Gas Malaysia has zero debt sits on a “war chest” of MYR327m, has consistently generated significant free cash flow and targets a minimum 75% dividend payout. Its strength is in its high cash flow generative capacity and dividends disbursement.
by Mayban IB
