The establishment of new townships and new customer connections for gas and electricity distribution can drive steady demand growth in Victoria and benefit SPN, in our assessment. Management reiterated that the group's regulated revenue (90% of total) has been locked in until 2011. All the latest resets were done by Apr 08 and there are no further regulatory resets until 2011. It will also remain focused on maintaining its A debt rating to secure future financing and manage its long-term cost of debt. We maintain our core net profit forecasts and DCF-derived target price of S$1.44 (WACC 10%). Distribution for 1H09 was within guidance and the stock will go ex-dividend on the SGX on 28 Nov 08.