YTL 4677 YTL CORPORATION BERHAD, YTLPOWR 6742 YTL POWER INTERNATIONAL BHD excite investors with good 3Q results. Can the Group sustain its growth momentum?
YTL Corp Bhd topped Bursa Malaysia most active list on May 26 with 117.4 million shares changing hands.
The counter increased 7% to close at its 52-week high of 84 sen on May 26. It fared well to rise about 42% in the past year.
Not too far behind on the actively traded list is its unit, YTL Power International Bhd, which saw some 42.2 million shares traded on May 26.
The counter also gained 7.8% on that day but over a year, it jumped some 65% to close at 1.24.
The strong 3Q financial results of both the companies helped boost investors’ sentiments.
They believe both YTLs are great recovery gems and hugely undervalued.
As it is, YTL group earnings will be catalysed by the following:
YTL Corp:
1. Wessex Water a water supply and sewerage utility company serving an area of South West England, to report stronger profits from Q4 FY2023 onwards due to water tariff hikes (beginning April 1, 2023) and expanding Regulated Asset Base (RAB).
2. Green data centres to start contributing earnings from Q1 2024.
It is developing YTL Green Data Centre with Sea Ltd, supported by the development of 500MW large-scale solar farm in Kulai. Potential more green data centre jobs to be secured for its Kulai site.
3. Potential revival of KL-Singapore high speed rail project.
4. Appreciating asset value over the long term for its Niseko and Sentul land bank.
5. Higher cement division contribution after costs drop off.
6. Higher hotels and shopping malls earnings contribution from higher tourism activities.
YTL Power:
1. PowerSeraya, which generates about 30% of Singapore’s energy needs, is expected to report continuous good profits over next 3 years due to current heat wave, tight electricity supply and strong Singapore dollars.
2. Maiden contribution from Jordan Power from Q4 FY2023.
3. Potential power export to Singapore in next few years
4. Digital bank venture to start contributing earnings from Q2 2024
It was awarded digital banking licence via Sea Ltd-YTL Power consortium), targeting the micro, small and medium enterprises segment.
Based on the numerous catalyst to the group’s earnings, the YTL counters should be worth much more than what they are trading at currently.
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Sheng Siong - Stock calls
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