3 Things You Need To Know About Tenaga Nasional Berhad

Malaysia-based Tenaga Nasional Berhad (KLSE: 5347.KL), or TNB, is in the business of generating, transmitting, distributing and selling electricity. It has a monopolistic market position in Malaysia in terms of its distribution network.

Given the importance of the company to Malaysia, here are three things you need to know about the company.

Power generation

TNB owns a series of power plants across the country that had a total generating capacity of 10,818 MW at the end of 2015. That is hardly enough to meet the demand for electricity in peninsular Malaysia, which saw a peak demand for electricity of 16,822 MW in 2015 (the peak came in the month of April).

Of the 10,818 MW in capacity that TNB has, gas accounted for 48.13%, coal contributed 40.14%, and hydro sources pitched in with 11.64%.

 Regional expansion

TNB is now looking beyond Malaysia to grow. The company is participating in a 600MW Sumatra-Peninsular Malaysia High Voltage Direct Current Interconnection Project with Indonesia’s national utility. The project will allow the import and export of power between Malaysia and Indonesia.

This will also set the stage for future collaboration between other ASEAN members in the grand ASEAN Power Grid plan.

Current earnings               

TNB is a company that generated revenue of RM43.3 billion (S$14.4 billion) in 2015. The company currently has a market capitalisation of RM81.2 billion (S$27.0 billion), which means TNB is trading at 12.7 times trailing earnings and has a 2% dividend yield.

Foolish Summary

TNB is a nationally-important enterprise in Malaysia. With its strong position in the country and its regional expansion on the way, it might be a company worth watching in the future.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim does not own shares  in any companies mentioned above.