Tenaga Nasional: Risk Reward Update

Research evidence excerpt

Tenaga Nasional: Risk Reward Update

UpdateM

RiskRisk RewardReward– Tenaga- NasionalTenaga(TENA.KL)Nasional (TENA.KL)

Energy Transition + Powering AI

PRICE TARGET RM15.90 OVERWEIGHT THESIS

Base case, DCF. We employ a 10-year unleveraged FCF model and consider terminal value for ▪Demand from potential datacenter

the business after 2035. In deriving our terminal value, we capitalize our terminal-year FCF development in Malaysia should anchor

projection by our WACC of 7.4% and incorporate 1% perpetual growth. demand for energy and help absorb spare

capacity and It should also help TNB raise RM16.34

the efficiency of its capex.

Consensus Price Target Distribution RM14.18 RM18.00 see nearly 75% of TNB's incremental MS PT ▪We

investment going into grid hardening andSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates

the management of intermittent supply. We

assume a WACC of 7.4%.

▪Power market tightness is set to stay but

RISK REWARD CHART the narrative driving multiples on Powering

AI has seen multiple risks emerge, especially

RM23.00RM23.00(+59.06%)RM23.00(+59.06%)(+59.06%) for US chip exports to South Asia. While

MYR valuations remain attractive vs peers, and

fundamentals are intact, we see possible

20 risks ahead.

RM15.90RM15.90(+9.96%)RM15.90(+9.96%)(+9.96%) Consensus Rating Distribution

15 RM14.46RM14.46RM14.46

100%Overweight

0% Equal-weight

10 0% Underweight

RM10.00RM10.00(-30.84%)RM10.00(-30.84%)(-30.84%) MS Rating

5 Source: Refinitiv, Morgan Stanley Research

0 Risk Reward Themes

MAY '25 NOV '25 MAY '26 MAY '27

New Data Era: Positive

Key: Historical Stock Performance Current Stock Price Price Target Pricing Power: Negative

Renewable Energy: Positive

Source: Refinitiv, Morgan Stanley Research

View descriptions of Risk Rewards Themes here