Maybank IB maintains 'buy' stance in YTLPOWR 6742 YTL POWER INTERNATIONAL BHD

Maybank IB maintains 'buy' stance in  YTLPOWR 6742 YTL POWER INTERNATIONAL BHD

The digital bank license is unlikely to contribute materially to YTL Power International Bhd’s (YTLP) earnings in the initial years, says Maybank Investment Bank (Maybank IB) Research.

KUALA LUMPUR: The digital bank license is unlikely to contribute materially to YTL Power International Bhd's (YTLP) earnings in the initial years, says Maybank Investment Bank (Maybank IB) Research.

As such, the bank-backed research house maintains its earnings forecasts and 90 sen target price on YTLP, based on a sum-of-parts, with the operating entities each valued by discounted cash flow.

"The digital bank license further solidifies the relationship between SEA Ltd and the YTL group (YTL Comm already runs a reward program with Shopee).

"We do not rule out more such collaborations in future," it said in a note.

The consortium between YTL Digital-SEA Ltd (YTL SEA) and YTL Digital Capital (a subsidiary of YTLP) has been awarded a digital bank license from Bank Negara.

Given previous uncertainty, the firm said the announcement confirms that the YTL group's exposure to the digital bank would be via YTLP.

"The shareholding split of the consortium remains unknown at the time of writing, with press reports alluding to YTLP having majority control.

"Given YTL SEA's digital expertise (including digital banking in Singapore), we would expect YTLP to play a support role in the digital bank operations," it said.

Maybank IB said the YTL SEA consortium was expectedly awarded the digital bank license, having been among the frontrunners during the bidding process in its view.

The announcement confirms that the YTL group's exposure to the digital bank would be via YTLP.

We reiterate Buy on the stock with an unchanged target price of 90 sen.

"We believe YTLP can comfortably sustain a five sen annual dividend per share in the coming years," it added.

https://www.nst.com.my/business/2022/05/794627/maybank-ib-maintains-buy-stance-ytlp