YTP  Power  International’s  1HFY14  core  earnings  of  MYR570.3m  were largely in line.  While there could be some selling pressure  if the longawaited  Project  3B  is  awarded  to  competitors,  all  is  not  lost  as  we expect it  to  bid for the Project 4A and 4B  tenders  (comprising  1,000MW each)  which  will  be  called  by  the  Energy  Commission  later  this  year. Maintain  NEUTRAL,  with  our  SOP-based  FV  tweaked  marginally  to MYR1.86 (from MYR1.90).
proved  contributions  from  its  Wessex  Water  operations  in  the  UK (+19.4%  y-o-y)  as  well  as  narrower  losses  from  its 

• Within  expectations.  YTL  Power  International  booked  revenue  of MYR7.8bn  (-6.4%  y-o-y)  in  1HFY14,  as  growth  in  most  of  its  divisions was  offset  by  its  Power  Seraya  unit,  which  saw  a  14.7%  decline  in topline due to continued headwinds amidst stiffening price competition in Singapore’s power industry.  Core earnings, however,  surged  15.7% y-oy to MYR570.3m (after stripping off MYR88.5m  in forex losses) owing to WiMAX  division  (-43.5%  y-o-y).  Earnings  were  largely  in  line  with  consensus  and  our expectations, at 50.9% and 50.3% of full-year estimates respectively. On a  quarterly  basis,  2QFY14  revenue  was  at  MYR3.8bn  (-5.3%  q-o-q;  -8.0%  y-o-y)  while  core net  profit closed at  MYR264.9m  (-13.2%  q-o-q; +3.5% y-o-y).  The company did not declare any dividend for the quarter, making it the fifth consecutive quarter without a dividend distribution.
• Opportunities ahead.  While we note that there could be some selling pressure  should  the  much-anticipated  Project  3B  be  awarded  to  the company’s competitors, we believe  that  all is not lost as we expect the group to participate  in the tenders  for Projects  4A and 4B, comprising of 1,000MW each,  to be called by the Energy Commission later this year .Should the company lose out on Project 3B, we  foresee  it being more aggressive  in  bidding  for  these  two  upcoming  tenders  in  order  to replenish its power generation base in Malaysia.
• Maintain NEUTRAL. With the results largely in line, we make no major changes to our core assumptions for FY14F and FY15F  at this juncture.However,  we  tweak  our  SOP-based  FV  marginally  to  MYR1.86  as  we fine-tune  our  model  for  housekeeping  purposes.  Given  the  limited upside, we maintain our NEUTRAL recommendation.

Financial Exhibits

SWOT Analysis

• YTP Power is one of the largest independent power producers (IPP) in Malaysia and Singapore

Company Profile
YTL Power is an independent power producer (IPP)  with presence in Malaysia and Singapore. It also  provides water and sewerage services in the UK, and has ventured into the provision of WiMAX internet services in Malaysia.

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Source: RHB