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A. Stotz Investment Research

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Tenaga Nasional Placement - Strong Track Record and a Potential Dividend Increase

Tenaga Nasional Placement - A Small Deal Size Relative to Previous Sell Down

Tenaga Nasional (TNB MK) - Take the deal, strong earnings growth likely to continue

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Equity Bottom-Up

<ul><li>Strong long-term earnings growth, relatively strong analyst recommendation, and low correlation with Western stock markets relative to its sector </li><li>TNB is committed to increase its abroad operations to account for 20% of its earnings by 2025; it has acquired 50% interest in one of UK’s largest solar power portfolios with a 365MW capacity in May 2017 </li><li>Two projects under construction should increase capacity by 25%: 1GW Manjung V coal fire power plant which is expected to commence soon and another 2GW plant which should be ready in 2019 </li><li>Attractive at 18CE* 9.6% ROE/PB versus ASEAN Utilities at 8.2% </li><li>Risk: Regulatory changes on tariffs and fuel cost pass-through, unscheduled outages, and economic slowdown</li></ul>* Consensus Estimates

Strong long-term earnings growth, relatively strong analyst recommendation, and low correlation with Western stock markets relative to its sector TNB is committed to increase its abroad operations to account for 20% of its earnings by 2025; it has acquired 50% interest in one of UK’s largest solar power portfolios with a 365MW capacity in May 2017 Two projects under construction should increase capacity by 25%: 1GW Manjung V coal fire power plant which is expected to commence soon and another 2GW plant which should be ready in 2019 Attractive at 18CE* 9.6% ROE/PB versus ASEAN Utilities at 8.2% Risk: Regulatory changes on tariffs and fuel cost pass-through, unscheduled outages, and economic slowdown* Consensus Estimates

Tenaga Nasional

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