Fundamentally strong Taqa underpriced 30%

Shares of Abu Dhabi National Energy Company (Taqa) are underpriced by at least 30 per cent compared to a one-year price target of Dh4.50, according to a new report.

"Our underpriced rating of Taqa is based upon the company's unique advantages to grow and capture value in a space with very positive underlying fundamentals. Against a background of tougher times for most of its competitors, Taqa's enviable established growth record is set to continue," Abu Dhabi-based TNI Investment Research said in a report titled "Taqa: A New Player on the Global Energy Landscape" yesterday.

Taqa share closed flat at Dh3.58, with 559,052 shares being traded.

Rapid global energy growth in both developed and developing nations sets a very attractive framework in which Taqa is fast becoming a significant player. The ability to capitalise and leverage off business units across the whole value chain from production to end-use gives the company a large competitive advantage over many of its peers. The energy sector is a dynamic industry and Taqa is already showing instances of how it proposes to capture value for its stakeholders in this evolving world.

The support of the Abu Dhabi Government and its blue-chip investment credit ratings place Taqa in a remarkable position to expand its global energy status.

The ongoing turmoil in world debt markets will have a major impact on the ability of many participants to source new debt or indeed refinance existing facilities. The company is capable of ongoing expansion against lessening competition for the many emerging opportunities.

The company's stated goal to increase its asset base three-fold by 2012 is an ambitious one. However given its financial strength and favourable investment climate, the research company sees the established growth trend being sustained.