YTL Power, YTL Corp hit fresh record high on AI hub tie-up with Nvidia

KUALA LUMPUR (Dec 11): Shares in YTL Power International Bhd continued their upward momentum on Monday towards a fresh high since the company’s listing in 1997, after it announced its partnership with US-tech giant Nvidia Corp to build an artificial intelligence (AI) data centre in Johor.

The counter opened seven sen or 2.89% higher at RM2.49, before peaking to a fresh record high of RM2.57.

YTL Power then pared some gains to close nine sen or 3.72% higher to RM2.51.

At RM2.51, the stock is valued at RM20.48 billion. It was briskly traded with a total of 110.59 million shares exchanging hands, ending the day as the fifth most-traded stock on Bursa Malaysia.

Since the beginning of the year, the stock has more than tripled from 72 sen.

Meanwhile, shares in its parent company YTL Corp Bhd also surged in tandem and emerged as one of the top actively-traded stocks in the local bourse on Monday.

YTL Corp, which opened three sen or 1.78% higher at RM1.72, soared to as high as RM1.88 before closing at RM1.87 — up 18 sen or 10.65% from the previous trading day, and also a fresh all-time closing high. At the present price, YTL Corp has a market capitalisation of RM20.61 billion.

It saw a total of 121.49 million shares traded, making it the fourth most-traded counter of the day. Year to date, the stock has soared by 228.07% from 57 sen.

YTL Corp holds a 48.98% stake in YTL Power International.

Last Friday, YTL Power, which owns Singapore’s YTL PowerSeraya Pte Ltd and water assets in the UK, announced that it will work with Nvidia to build an AI infrastructure hub in its 500MW (megawatt) solar-powered Green Data Centre Park that will bring the fastest supercomputers to Malaysia by the middle of 2024.

RHB Investment Bank Bhd, in a research note on Monday, raised its target price for YTL Power to RM2.95 from RM2.72, and maintained its “buy” call on the stock, and expressed a long-term positive view on its new collaboration with Nvidia.

The research house highlighted that YTL Power’s earnings growth should strengthen upon its successful delivery of the project in the long run, but investors ought to take note that additional capital expenditure (capex) requirements ahead could be rather intensive.

“We are unable to ascertain the earnings impact of this YTL Power-Nvidia deal at present.

“For the current 48MW hyperscale data centre (estimated capex: RM1.5 billion), the contract tenure is more than 10 years, and we estimate it to potentially generate [a] profit before tax (PBT) of RM100 million per annum,” it said.

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