YTLP announced the disposal of 33.5% stakes (including all related loan notes) in ElectraNet for AUD1.03bn (RM3.06bn). YTLP will recognise a disposal gain of RM2.2bn. The cash proceeds has been identified for future investment purposes, which we have seen YTLP recently ventured into LSS, data centre and participated in the application of Malaysia Digital Banking Licenses. Maintain BUY with unchanged TP: RM0.85 based on 10% discount to SOP: RM0.93.

NEWSBREAK

YTLP has entered into share purchasing agreement with Australian Utilities for the disposal of:

i) 3,350 fully paid ordinary shares comprising a 33.5% equity interest in ElectraNet (“Sale Shares”);

ii) 3,300 shareholder loan notes (“Shareholder Loan Notes”) and 2,550 preferred loan notes (“Preferred Loan Notes”) issued by ElectraNet to YTLP; and

iii) 26,278,794 subsidiary shareholder loan notes issued by ElectraNet to YTLP (collectively, with the Shareholder Loan Notes and the Preferred Loan Notes, referred to as the “Loan Notes”),

for a total sale consideration of AUD1.03bn (equivalent to RM3.06bn).

YTLP will recognise a gain of disposal of RM2.2bn from the exercise, which is expected to complete by end of 2QCY22.

HLIB’s VIEW

Positive. We are overall positive on the exercise, allowing YTLP to monetise its maturing asset investments. The cash proceeds will be used by YTLP for future investment purposes. Recently YTLP has revealed its new venture for 500MW large scale solar plant (acquired 664 ha land in Kulai for RM428.8m) and acquired Dodid, a 12.5MW data center operator in Singapore. It was also revealed that YTLP is partnering Shopee for the application of the Malaysia Digital Banking Licenses.

Forecast. Unchanged.

Maintain BUY, TP: RM0.85. We remain positive on YTLP’s outlook with Seraya Power leveraging on the recovering Singapore economy, Yes Communication leveraging on increasing data demand in Malaysia and the commencement of Attarat Power in 2HFY22. We also expect sustainable dividend payout by the group. Maintain BUY recommendation, with unchanged TP: RM0.85, based on 10% discount to SOP: RM0.93.

Source: Hong Leong Investment Bank Research - 9 Feb 2022