KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) favours Tanjong plc and Tenaga Nasional Bhd under the government’s plan to expand the power generation capacity.

The government has planned for two new coal-fired plants worth RM7 billion under the 10th Malaysian Plan (MP) that runs from 2011-2015. It will call for an open tender for the new plants in Aug from the three existing coal plant producers - Janamanjung (Tenaga), Jimah (not listed) and Tanjong Bin (under MMC Corp).

HDBSVR said on Tuesday, July 20 that Tanjong is its top pick with acquisition of new power assets as the key catalyst, and upside from potential new NFO games, unlocking of asset values, and turnaround of Tropical Island.

“We also favour Tenaga for its attractive valuation and potential upside from tariff hikes. Maintain Hold for YTLP for sustainable 6% net yield, supported by PowerSearaya's growing contribution and strong operating cashflows from water and power operations,” it said.