KUALA LUMPUR, Feb 10 — Maybank Investment Bank (Maybank IB) has maintained its "hold” call for Tenaga Nasional Bhd’s (TNB) shares with an unchanged target price of RM9.60, following the favourable court decision on TNB’s tax dispute with the Inland Revenue Board (IRB).

On Tuesday, it was reported that the High Court allowed TNB’s judicial review application to set aside IRB’s notice of RM1.8 billion tax assessment for 2018.

The High Court ruled that TNB is in the business of making electricity and is thus entitled to claim reinvestment allowances on the capital expenditure incurred in 2018.

In a note, Maybank IB said the decision bodes well for TNB’s remaining and similar disputes for prior assessment years, thus alleviating a longstanding overhang.

"Nevertheless, the extremely elevated coal prices means concerns over the Imbalance Cost Pass-Through (ICPT) mechanism will continue to take centre stage.

"While valuations are attractive, we think the stock is unlikely to re-rate significantly due to lingering concerns over the ICPT mechanism,” it said.

At 12 pm, TNB’s share price eased two sen to RM9.24 with 1.02 million units traded. — Bernama