KUALA LUMPUR (Aug 22): Shares of YTL Power International Bhd (KL:YTLPOWR) snapped five straight days of losses on Thursday thanks to better-than-expected results while analysts and investors bet on data centre-led growth.

YTL Power rose as much as 36 sen or nearly 10% to RM4.11. The stock was trading at RM4.01 at 9.35am after more than 16 million shares changed hands, making it one of the top gainers and most active stocks on Bursa Malaysia.

The results for FY2024 ended June 30 came in above market expectations, and there are now more upside to share price following recent correction, prompting at least three analyst upgrades.

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Kenanga Investment Bank, Maybank Investment Bank, and CGS International said YTL Power shares are now attractive following a 30% decline in prices since May.

“We now see a more favourable risk-reward trade-off at these levels,” said CGS.

Shares of YTL Power are still up more than 57% year-to-date amid a rally in the utilities sector as investors bet on higher demand for electricity amid a slew of investments into power-hungry data centres. YTL Power itself is also building data centres in Malaysia and Singapore.  

There are now 13 ‘buy’ calls on YTL Power and only one ‘hold’ recommendation. The consensus 12-month target price is RM5.85, according to Bloomberg, implying a potential return of 46% from its last price.

YTL Power’s water and wastewater business in the UK under Wessex Water also returned to the black in the fourth quarter of FY2024, which should “alleviate investors’ concerns on earnings delivery”, said Maybank Investment Bank. Wessex Water will also recover further in FY2025, the research house said.

The company appears confident of securing Nvidia Corp’s chips by June 2025, and the first 20-megawatt artificial intelligence data centre is expected to ramp up next year, said RHB Investment Bank in a note.

The research house maintained its ‘buy’ recommendation, noting that Wessex Water will recover more meaningfully in FY2025 on the back of annual tariff adjustments and help anchor YTL Power’s earnings. 

https://www.theedgemarkets.com/node/723781