TANJONG: BUY, target price RM18.66

ECM Libra Investment Research has upgraded Tanjong Plc (2267) to "buy" from hold. This is based on a discounted cash flow based target price which is higher by 3 per cent, following the release of its latest annual report.

The research house is expecting a net dividend a share of 75.8 sen for the financial year ending January 31 2011 and to yield 11 per cent in returns.

This comes despite an earnings estimate that is 12 per cent lower at RM3.75 billion for the current year, which is reflective of a strong ringgit against the US dollar at RM3.30 compared with RM3.50 previously.

ECM Libra said that going forward, the re-rating catalysts for Tanjong includes securing of a new lotto game and overseas power plants.

At a net gearing level of 0.9 times, Tanjong will be able to embark on mergers and acquisitions.



- by Business Times