Important time-tested proven market rules or tips

YTLPower - Latest updated report and new target price

OTB
Publish date: Thu, 07 Mar 2024, 09:17 PM
OTB
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Dear valued members,

Special note:

This is an educational program, stock selection criteria is based on TA and FA facts. 

Projected FY 2024 result
  1. PAT = 3.426 billion
  2. NOSI = 8.158 billion
  3. EPS = 0.42
  4. The average PER of FBMKLCI component stock is 15

  5. If PER = 15, Target price = 6.30
Nvidia and YTLPower partner for USD 4.3 billion AI data centers in Malaysia

  1. Please read the link below.
  2. https://www.datacenterdynamics.com/en/news/nvidia-ytl-power-partner-for-43bn-ai-data-centers-in-malaysia/
  3. USD 4.3 billion =  RM 20.00 billion (1 USD = RM 4.65)
  4. I believe Nvidia will utilise a capex of RM 4.30 billion only in FY 2025 (after June 2024)
  5. Capex = RM 4.30 billion
  6. Revenue = RM 860 million (20% of Capex)
  7. EBITDA margin 50% = RM 430 million
  8. PAT = 310 million (Assuming 28% tax)
  9. Additional EPS = 0.038 in FY 2025
  10. I believe EPS for FY 2025 is 0.458 
  11. If PER = 15, Target price = 6.87 in 2025
FY 2026

  1. If Nvidia utilises a capex of RM 20 billion in FY 2026 (after June 2025)
  2. Capex = RM 20 billion
  3. Revenue = RM 4.0 billion (20% of Capex)
  4. EBITDA margin 50% = RM 2.0 billion
  5. PAT = 1.400 billion (Assuming 28% tax)
  6. Additional EPS = 0.196 in FY 2026
  7. I believe EPS for FY 2026 is 0.62
  8. If PER = 15, Target price = 9.30 in FY 2026.
Nvidia

  1. Data centre contributed USD 18.4 billion revenue to Nvidia
  2. USD 18.4 bil = RM 88 billion (1 USD = 4.78 RM)
  3. If YTLPower just get 1 plus % of this revenue, it will be adding RM1 billion to its revenue
  4. Please note that the Singapore market accounts for 20% of Nvidia's revenue.
  5. There is no land available in Singapore to house Solar-powered green data storage centers, thus the data storage centre of YTLPower at Kulai Johor is the most suitable one due to its proximity to Singapore.
Malaysia To Get Supercomputer As Part of NVIDIA, YTL RM20 Billion AI Investment

  1. Please read the link below.
  2. https://www.lowyat.net/2024/317650/malaysia-to-get-supercomputer-as-part-of-nvidia-ytl-rm20-billion-ai-investment/
  3. RM4.3 billion worth of investments are expected to be made by June 2024.

BY JOHN LAW MARCH 1, 2024

Remember back in December when Jen-Hsun Huang, CEO of NVIDIA, made a trip to Malaysia, where it was announced that he was partnering up with YTL to bring his company’s supercomputers into the country by the middle of this year? Well, our minister of Investment, Trade, & Industry, Tengku Zafrul, reaffirmed that the original plan is on track.

As per an official post on X, formerly Twitter, Zafrul confirmed that the the NVIDIA and YTL partnership will see a total investment of RM20 billion, with an initial RM4.3 billion set to be invested throughout the first phase of its plan, which is scheduled to take place in June 2024. Further, and as mentioned earlier, that investment will also see the two companies bringing in what the minister describes as the “fastest” supercomputer into the country.

Latest news on 1/3/2024

  1. Brabazon: Revised plans for 6,500 Filton homes approved.
  2. https://www.bbc.com/news/uk-england-bristol-68434412
  3. YTL Development UK is a subsidiary of YTLPower.
  4. The developers said the development is forecast to create more than £5 billion of added economic value as well as more than 30,000 jobs.

  5. YTLPower has secured this property project worth RM30 billion in the UK. 
Re-rating of YTLPower
Good developments at the company has sparked a major re-rating of YTLPower.

  1. Inclusion into KLCI component index in early Dec 2023
  2. Announcement of collaboration with Nvidia to develop AI data centres in mid Dec 2023
  3. Winning the EMA tender for development of a new 600MW hydrogen-ready CCGT in Jan 2024
  4. Announcement of inclusion into MSCI in mid Jan 2024 and official inclusion on 29 Feb 2024
  5. Approval for the Brabazon property development project with enlarged plan of 6,500 homes and 4 million sf commercial area
The share price of YTLPower is in consolidation mode

  1. Any long rally of a stock will need a pause for it to consolidate gains, also to allow some early investors to take some profits and for late comers to get into the stock on profit taking.
  2. If we take a longer term view of 12 months to 24 months, this stock has been performing in a fantastic form, way better than our initial expectation. 
  3. But if I look around the Bursa stock universe, it is really hard to find another good fundamental stock with better prospects and earnings certainty like YTLPower favoured by foreign funds.
  4. If we think foreign funds will come into Bursa in a big way and Bursa will see a bull run in 2024 and 2025 as envisaged by ICap Mr. Tan Teng Boo (who expects KLCI to test 2,500-3,000 points in next 2-5 years), I believe YTLPower will be the first choice favours by foreign funds because of the partnership between Nvidia and YTLPower.
  5. The technical chart pattern of YTLPower is a "Cup And Handle" chart pattern. Please look at the technical chart yourself. The Cup was formed from 30/1/2024 to 27/2/2024. The Handle starts to form from 28/2/2024 onwards.

    I hope to see the Handle is formed by 15/3/2024 if the share price can break the new high at 4.24. If the share price can break the new high above 4.24, there is a good chance that the share price can move up north towards 5.00 and higher at a faster rate ..... My target price for YTLPower is to reach 6.30 before 30/6/2024.

  6. The share price of YTLPower is in consolidation mode awaiting breakout above 4.24. I believe this consolidation will be short and over may be by 15/3/2024. Any weakness is a buying opportunity if you think the share price will breakout above 4.24 soon.
  7. Enclosed is the technical chart of YTLPower for your perusal.
Summary of the target prices of YTLPower from now until June 2026.
  1. FY 2024 ends on 30/6/2024, if the target price is based on PER=15, the target price is at least 6.30 before 30/6/2024.
  2. If Nvidia and YTLPower partner for the RM 4.3 billion "AI data storage centers" project in FY 2025 (July 2024), the EPS for FY 2025 will be at least 0.458.
  3. Based on PER=15, the target price = 6.87 in 2024 after July 2024 until June 2025.
  4. According to one of the IBs, the PER should be equal to 18 if the "AI data storage centers" project starts in July 2024.
  5. If PER=18, the target price of YTLPower should be 8.24 after July 2024 until June 2025.
  6. Based on the present price of YTLPower at 3.84, the potential gain is 115% if you buy and hold YTLPower shares from now until June 2025.
  7. If Nvidia invests RM 20 billion in the "AI data storage centers" project in FY 2026 (July 2025), the EPS for FY 2026 will be at least 0.62. 
  8. Based on PER=15, the target price = 9.30 in 2025 after July 2025 until June 2026.
  9. If PER=18, the target price of YTLPower should be 11.16 after July 2025 until June 2026.

  10. I believe the fair target price should be based on a PER=15, along the way I will change or amend the target price accordingly if the EPS is lower or higher. I will stick to a PER=15 because the average PER of FBMKLCI component stocks is around this level.
  11. I do not include the Brabazon property development project in this projection or calculation of PAT in FY 2025 and FY 2026.
  12. I recommend you buy YTLPower shares on price weakness, hold them for 24 months to win big in your investment.
  13. There is no sure win in the stock market, this write up is based on known fundamental facts available to the public.
  14. Please note that some of the points are taken from the articles written by Mr Dragon Leong or dragon328 in I3. 
  15. I would like to set a stop loss level for this stock, please cut loss if the share price falls below 3.20 level.
The final decision to buy is always yours.

Thank you.  

Ooi

寧可天下人負我, 休教我負天下人

Disclaimer :
This is an educational program, stock selection criteria is based on TA and FA facts.   

Please be informed that the aforesaid stocks are solely for the purpose of education only ; it is neither a trading advice nor an invitation to trade. For trading advice, please speak to your remisier or dealer representative.
The final decision to buy is always yours.


YTLPOWR (6742)
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Discussions
8 people like this. Showing 22 of 22 comments

Plantermen

The re ratings will come in once the DC earnings kick in and materialised. Initial target price will revised upwards. YTLP earnings are 80% generated by their foreign business operations which translate into FX gain vs our MYR

1 month ago

jenson68

Thanks for the insight @ OTB!
Continue hold tight & keep for long term, hehe

1 month ago

dragon328

Good summary, MR. OTB.

Agreed that AI data centre business will drive YTL Power to new highs in next 2 years.

1 month ago

OTB

The target price is derived from the EPS. I use a PER=15.
If the EPS for FY 2024 is higher than 0.42, I will revise up the target price using a PER=15.
Likewise, I will revise down the target price if the EPS is < 0.42.
I will monitor the earning of YTLPower very closely and update it accordingly.
I write this article with all good fundamental facts and also known facts available to public.
I write this article for easy reference.
Thank you.

1 month ago

Invest_888

Once AI data centre contributes profit to YTLP, the share price will fly higher and higher.

1 month ago

Jilohhuat

Thank you Mr OTB , we do appreciate your kind input. You will get good karma.

1 month ago

OTB

Thank you for your kind words.
I also believe in karma.
Good deeds means good karma.

I share information here with good deeds.
According to my religion, I will be very bless.
I believe so because I make a fortune from YTLPower in 2023/4.
I sailang YTLPower at 1.10.
God bless me always.
Thank you.

1 month ago

MrFox

that is y i didnt panick ! to me the sharp drop in price today is just a passing storm!!!!

1 month ago

MrFox

certainly YTLP knows! as YTLP is REAL!!!!!
haha

1 month ago

Mabel

Good summary, MR. OTB.

Thank you so much for sharing...

With Power Cum Responsibility...

To Our Success !

Meow

1 month ago

sayyouloveme

Thanks for insights. I am new to collect YTLP. hopefully i am not too late.

1 month ago

OTB

Posted by cktay > 16 hours ago | Report Abuse

https://www.businesstoday.com.my/2024/03/11/ipp-ytlps-potential-value-on-dc-investments-yet-to-be-fully-priced-in-cgs-reiterates-add/

1 month ago

OTB

Posted by cktay > 16 hours ago | Report Abuse

IPP YTLP’s Potential Value On DC Investments Yet To Be Fully Priced In, CGS Reiterates Add
CGA reiterates Add on YTLP with an unchanged SOP-based TP of RM4.50

1 month ago

OTB

Hope that the share price of YTLPower will cross 3.71 next week to confirm a trend reversal.
Once 3.71 is crossed convincingly, stochastic, daily MACD, Parabolic SAR and Force index will show buy signals to confirm the long correction mode is over.
This correction is quite long, it lasted > 1.5 months.
The uptrend will start after 3.71 is crossed convincingly.
Good luck.
Thank you.

1 month ago

OTB

Posted by HuatRex1314 > 21 hours ago | Report Abuse
Based on my 20 years of TA analysis, ytlp will break above 3.70 very soon. Let's see.
------------------------
Looking at the closing price at 4.50 pm, many buyers appeared and absorbed many big selling orders.
The volume transacted at 4.50 pm is around 34 million shares at 3.68.
I believe your prediction is excellent, hope that the share price of YTLPower will cross 3.71 next week.
Good luck.
Thank you.

1 month ago

OTB

Posted by HuatRex1314 > 21 hours ago | Report Abuse
Based on my 20 years of TA analysis, ytlp will break above 3.70 very soon. Let's see.
------------------------
Looking at the closing price at 4.50 pm, many buyers appeared and absorbed many big selling orders.
The volume transacted at 4.50 pm is around 34 million shares at 3.68.
I believe your prediction is excellent, hope that the share price of YTLPower will cross 3.71 next week.
Good luck.
Thank you.
-------------------------------
I hope that the share price of YTLPower will cross 3.71 to confirm a trend reversal.
It is even better if the share price can cross 3.79 convincingly because 3.79 is the price level of 20-day EMA.
Once 3.71 is crossed convincingly, stochastic, daily MACD, Parabolic SAR and Force index will show buy signals to confirm the long correction mode is over.
This correction is quite long, it lasted > 1.5 months.
The uptrend will start after 3.71 is crossed convincingly.
Looking at the monthly chart, the present correction is a Second wave down. Once the Third Wave up starts, the share price movement will be very fierce. I believe the share price of YTLPower will move up north very fast. I also believe the target price of YTLPower in 2024 will be very high.
My 2 cents comment based on TA.
Thank you.

1 month ago

OTB

Posted by dragon328 > 16 minutes ago | Report Abuse

Hong Leong analyst Daniel Wong gave a very good update report on YTL Power this morning, reiterating BUY call with a tp of RM5.55.

After getting a management update, he commented on the latest AI venture development: "The mew setup YTL AI Cloud, in deploying and managing NVIDIA's latest Grace Blackwell-powered DGX Cloud (adopting GB200 GPUs), indicates NVIDIA's strong support of YTLPI's digital venture."

On Wessex Waters, he mentioned that the announced 11-12% average tariff hike for wholesale and 12-14% tariff hike for household effective Apr 2024 will revert Wessex into black in 4QFY2024 and a full year turnaround in FY25. It is also estimated of a further 15% increment in average tariff based on upcoming AMP8 (2025-2030) proposal for higher GBP3.5 billion capex spending (vs. GBP1.5bn in AMP7) and higher allowable real return (WACC based on CPIH) of 4.39% (vs 2.96% in AMP7). Hence he expects an even stronger results from FY26 onwards with accelerating RCV asset size (GBP4.2bn as at end-2023).

On PowerSeraya, he stated that Singapore's retail electricity prices continued to trend higher for the past few months (with actual data from major electricity retailers) despite the drop in average wholesale USEP. He said the management had guided that 75-80% of PowerSeraya business is driven by retail segment with another 10-15% by SP Group (i.e. vesting contracts with fixed margin). Hence the exposure to the wholesale USEP segment is just 5-10%.

"While YTLP does not have direct peers, we are still able to relate YTLP's earnings to Keppel, Sembcorb Industry and First Pacific with regards to the Singapore utilities sector. Bloomberg concensus has been estimating increasing earnings for Keppel, Sembcorp and First Pacific for FY12/24-26, contrary to YTLP's concensus estimating deteriorating earnings profile for FY06/24-26. We believe the concensus estimates is mainly due to concensus' lack of understanding of Singapore's utilities structure and consequently, earnings sustainability of YTLP."

This clearly supports my earlier argument that PowerSeraya's earnings will sustain into 2026 as there will be no new capacity supply in Singapore. Local analysts' projection of substantially lower earnings for PowerSeraya in FY06/24-26 is due to the lack of understanding of the Singapore electricity market and structure. They have obviously over-played the "normalisation" of PowerSeraya earnings.

1 month ago

OTB

Posted by dragon328 > 13 minutes ago | Report Abuse

Hong Leong analyst has made a non-biased and professional assessment of the earnings prospect of YTLP, projecting a net profit of RM3.327b (EPS of 41.1 sen) for FY24, RM3.794b (EPS of 46.8 sen) for FY25 and RM3.896b (EPS of 48.1 sen) for FY26.

These are very close to what I have projected earlier - EPS of 40-42 sen for FY24 and 45+ sen for FY25 incorporating only 6 months (Jan-Jun 25) of contribution from AI data centre.

1 month ago

OTB

Posted by cgtan2020 > 19 minutes ago | Report Abuse

@dragon328 CoreWeave will have about 45,000 GPU (NVIDIA HGX H100) in 2024, with each GPU rent @ USD4.76 per hour. If 90% of the capacities is on rent, it will generate about USD1.688Billion of revenue in 2024. How do you think YTL AI DC of 100MW will be like when all is deployed? Conservative guess will do.
-------------------------
Sorry !!
I try my method to calculate the EPS based on the aforesaid information.
Revenue = USD 1.688 Billion = RM 7.934 Billion (1 USD = RM 4.70)
EBITDA margin 50% = RM 3.967 Billion
PAT = 2.856 Billion (Assuming 28% tax)
NOSI = 8.158 Billion
Additional EPS = 0.35 in FY 2024
EPS from normal operations = 0.42
Total EPS = 0.77
If PER = 10, Target Price = 7.70
If PER = 15, Target Price = 11.55
Thank you.

1 month ago

Permutation

Looks like one should invest 100% in this counter?

1 month ago

CaoCao


This is an evil statement!!! Promote stock also has a limit. Never teach people all in !!!

Posted by Permutation > 10 minutes ago | Report Abuse

Looks like one should invest 100% in this counter?

1 month ago

Permutation

Evil Statement? hardly. Know your risk profile when investing. Want zero risk? put all in FD.
Want calculated risk ? YTLP. Today [ 22.3.2024] price RM3.90 . My 12 months TP RM6. ; 24 months TP RM7.50
Too far fetch? Dont buy. No one force you to buy. Look before you leap, think before you buy !

“Far better it is to dare mighty things, to win glorious triumphs, even though checkered by failure, than to rank with those timid spirits who neither enjoy much nor suffer much, because they live in the gray twilight that knows neither victory nor defeat.”

1 month ago

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