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YTL & YTLPOWR: A Powerhouse Performance - Is This Stock a Must-Have in Your Portfolio?

KingKKK
Publish date: Fri, 23 Feb 2024, 07:54 AM

Dragon328 has written a comprehensive article about YTL and YTLPOWR earnings yesterday, the details in the link below.


YTL & YTL Power - Ended Year 2023 with a Bang | I3investor


I will summarize his article into pointers below:


1. Superb earnings: YTL Power's net profit was RM845 million, a surge by 325% against similar quarter last year. PowerSeraya, Wessex Water, and Jordan Attarat Power were the main profit drivers.

2. YTL Power is worth minimum RM6.30: dragon328 said that It should at least trade at 15x PER or RM6.30 per share to be comparable with Tenaga which has similar profit level of over RM3.0 billion.

3. YTL is worth RM4.00: dragon328 said that it should be trading at PER of about 20x (to be on par with Sunway) or RM4.00.

My view:

1. Agreed, YTL Power and YTL are both undervalued at the current price level. The article by dragon328 is great, and his speed in producing it is superb!

2. After reporting strong earnings, NVIDIA's share price surged by 16%, breaking some world records. Details can be found in the news below:

(NVDA) Nvidia Tops Meta Record With $277 Billion Jump in Value - Bloomberg


I think the price direction will follow NVIDIA's for both YTL and YTLPower.

3. If you think AI and Data Centers are already over just because YTL and YTLPower have increased significantly, you may be assuming that the AI and Data Center businesses have already peaked. This is similar to 30 years ago when Microsoft Office began revolutionizing how computers work; some people were saying, 'Oh, Microsoft's share price has already risen significantly, let's go back to using typewriters.


What are other stocks with strong fundamentals?

Check some of my articles below:

PBA - New Intrinsic Value is RM3.60 (KingKKK) | I3investor

APM - An UNDERVALUED GEM Revving Up For Growth (KingKKK) - Intrinsic Value: RM4.66 (60% upside) | I3investor

UTILITIES Sector (KingKKK): Fueling the Nation: Identifying the Top Performers in the Malaysian - YTLPOWR, YTL, RANHILL, PBA, TENAGA, PETGAS, MALAKOF, ENGTEX | I3investor

Property Sector - Pre-CNY Rally Leaders and Laggards? Discussion about E&O, SIMEPROP, UEMS, SPSETIA, SUNWAY, IOIPG, MAHSING and ECOWLD - (KingKKK) | I3investor

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1 person likes this. Showing 2 of 2 comments

Bullstocks888

@KingKKK, I agreed with you YTLPower and PBA are multibagger stocks! Interesting to see which stock hit RM4.50 first.

Posted by Bullstocks888 > 2 weeks ago | Report Abuse

@dragon328, I agreed with you that PBA is grossly undervalued! Fundamentals are getting stronger because they can raise tariff every 3 years and pass on ICPT surcharge to consumers. Still no analyst coverage? It seems that all the analysts are sleeping. I have been averaging up. Topped up at RM2.18.

Posted by dragon328 > 1 week ago | Report Abuse

Correct @Bullstocks888.

PBA is still grossly undervalued at current prices. Though no analyst covers this stock now, the only entity that gives a fair value to PBA currently is SimmmplyWallSt that gives a fair value of RM4.17.

It used a DCF valuation method and actual data of company free cashflows extrapolated forward. It assumed FCF of RM69.53 million for FY2024, obviously it has not taken into account the recent water tariff hike from 1st Feb 2024.

Nonetheless, the valuation of RM4.17 already gives a good upside of over 80% from current share price of RM2.28, even after it used a relatively high discount rate of 9.01%.

By early next year, once this institution has the more updated financial data of PBA post water tariff hike, the fair value will get a further boost from RM4.17.

1 month ago

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