CGS-CIMB Securities Sdn Bhd noted that TNB is likely to hold onto its monopoly in the electricity transmission and distribution segment.

Furthermore, it expects the energy company to have “decent dividend yields” of more than 5% for the financial years 2022 to 2024.

It said TNB is also poised to benefit from Malaysia’s energy transition such as additional grid investments and renewable energy opportunities. “This could boost earnings and improve public perception to its environmental, social and governance (ESG) (status),” CGS-CIMB said.

It said that while the initial public offering (IPO) of GenCo is not expected to materialise in the next two to three years, TNB remains focused on improving the efficiency of its existing assets as well as on its decarbonisation plans.

“GenCo will evolve into a cleaner electricity generator through early retirement of selected coal plants, repowering of retired generating facilities with cleaner fuels, the introduction of new green tech options and the forging of strategic partnerships,” CGS-CIMB said.

It has kept its “add” recommendation with an unchanged target price of RM13.30 per share.

Public Investment Bank Bhd is maintaining its “outperform” call as well as target price of RM12.42 per share on TNB based on several factors.

It noted that the power company has set a target to reduce its greenhouse gas emission intensity by 35% and its coal capacity by 50% come 2035, with the ultimate goal of becoming coal-free by as early as 2050.

“TNB also aspires to grow its earnings before interest and tax by about 140% to RM19 billion. Expenditure is estimated to be around RM10 billion to RM20 billion yearly over the next 30 years,” Public Investment Bank noted.

As of 11.45am today, TNB shares on Bursa Malaysia rose four sen to RM8.93 with 1.04 million shares changing hands.