Latest news with #RM840.1
BusinessToday
29-07-2025
- Business
- BusinessToday
CIMB Backs TNB Despite RM5.8 Billion Tax Overhang
CIMB Investment Bank Bhd (CIMB Securities) has maintained its BUY rating on Tenaga Nasional Bhd (TNB) with an unchanged target price of RM15.75, even as the utility giant faces a new tax challenge after receiving a Notice of Additional Assessment for 2022 amounting to RM840.1 million from the Inland Revenue Board (IRB). The research house said this latest assessment brings the total cumulative amount from notices issued for 2013–2021 to RM5.89 billion. It added that there remains a risk the IRB could issue further assessments for 2023 and 2024, which may push the total closer to RM8 billion based on capital expenditure trends. TNB is currently assessing its legal options in response to the notice, taking into account its pending application for Investment Allowance (IA) under Schedule 7B of the Income Tax Act 1967 submitted to the Ministry of Finance. CIMB Securities highlighted that this follows the Federal Court's recent decision to overturn earlier rulings in TNB's favour regarding a similar assessment for 2018, concluding that the correct tax schedule applicable is Schedule 7B rather than Schedule 7A. CIMB Securities noted that in the worst-case scenario where TNB pays the full amount, including possible future assessments, the impact on its discounted cash flow-based target price could be as high as RM1.30 to RM1.40 per share, or 8–9%. However, this impact would be smaller or even negligible if the group's IA claims are approved. Despite the tax uncertainty, the house maintained its positive stance on TNB, citing its reasonable valuation at 7.0 times forecast FY2026 enterprise value-to-EBITDA and dividend yields projected between 3.3% and 4.0% for FY2025 to FY2027. The brokerage expects the company's earnings to remain resilient, underpinned by regulated returns and stable operational cash flows. As of July 28, TNB shares traded at RM13.60. Related
Barnama
28-07-2025
- Business
- Barnama
TNB Shares Slip At Mid-morning After RM840.1 Mln IRB Tax Notice
BUSINESS KUALA LUMPUR, July 28 (Bernama) -- Tenaga Nasional Bhd's (TNB) shares slip at mid-morning trading after receiving a notice seeking an additional RM840.1 million in assessment for 2022 from the Inland Revenue Board (IRB). At 10.51 am, the counter fell 18 sen to RM13.42 with a total of 2.91 million shares traded. In a note today, CIMB Securities Bhd said the issue was due to the cumulative amount from notices seeking additional assessment for the years 2013–2021 of RM5.05 billion, net of remission of penalties and RM1.76 billion paid to IRB in December 2020, for 2016-2017, bringing the total to RM5.89 billion to date. 'We believe there is a risk that the IRB may also potentially issue a notice of additional assessment for 2023–2024. 'If TNB's 2023-2024 financial year capital expenditure provides any indication, we think the additional tax assessment for 2023–2024 could be around RM2 billion, which raises the total amount for 2013–2024 to nearly RM8 billion,' it said. The investment bank also said in light of the Federal Court's decision regarding a similar notice for 2018, TNB is currently evaluating its available legal options to address the issue. 'This evaluation takes into consideration that TNB has already applied for investment allowance (IA) under Schedule 7B of the Income Tax Act 1967 (including those for 2022) to the Finance Minister,' it said. Therefore, CIMB Securities has maintained a 'Buy' call on TNB with a target price of RM15.75 per share. On July 2, the Federal Court's final ruling allowed the IRB's appeal, overturning the decision by the High Court and the Court of Appeal, which had previously ruled in favour of TNB's judicial review application to set aside the notice of additional assessment amounting to RM1.25 billion for 2018.
