@kcwong98, I am afraid that I have no more information on the UK Brabazon land development than what you already stated above.

On paper, the GDV looks big at 2.5 billion pounds or RM13.7 billion. If we assume a gross development margin of say 15%, there will be a gross margin of RM2.0 billion to be realised over next 10 years or so.

As I understand it, property projects in the UK can be booked in only when the houses are completed and handed over to buyers, so we do not see any contribution yet from this project.

Genting Singapore share price rally is well expected for reasons explained in my earlier article.

Maybank research yesterday upgraded Genting Singapore to a BUY with tp of S$1.18, an 23% uplift citing similar reasons. To note that its projected EBITDA of S$1.307 billion for FY2024 is not too far off from my earlier projection of S$1.4 billion.

I expect Genting Singapore share price to continue upwards trend to beyond S$1.20 in coming months. This will create another 60 sen in value to Genting Bhd.

I think EPF sold again and press it from 0.90 to 0.865

UK corporate tax rate hike to 25% has been well expected, already announced back in 2021 and Wessex has already provided for the deferred tax charge increase, so it was a no issue.

EPF selling YTLP is an obvious mistake, as it turns to more like a short term trader now, EPF will lose out on the long term high dividend yields in years to come if it takes profit on the 10% share price gain.

It is natural for YTLPower to run up first as it reported strong earnings rebound and more to come. YTL Corp will follow soon after MCement catches up with explosive earnings growth in this quarter and next.

YTL Corp construction order book is boosted by the huge green data centre jobs secured by YTL Power, total 248MW so far or about RM7.5 billion worth of construction work to YTL.

HSR is the wild card as it would boost YTL construction order book by many folds even if it secured just the southern portion of the KL-Singapore stretch.

Anyway the market is weak depressed by external factors like the collapse of SVB and troubles at Credit Suisse. It may be wise to sell first and increase cash holdings in such an uncertain market that may last for few more months.

Though I do not have any shares in BJFood, after I sold off near RM4.80 before bonus issues, it came as a surprise to me when BJfood announced to have purchased 1.07% in SEM. I have interests in SEM and I still think SEM is undervalued at current prices or RM1.85.

It is interesting to see so much of related party transactions between Berjaya Group of companies and SEM. First it was SEM to do aggressive share buyback and push the share price to RM2.40. Then when it reached 10% max share buyback, the share price collapsed back to RM1.60 level when I picked up again after selling some at RM2.30-2.40.

Then VT himself and BJLand / BJCorp bought directly into SEM and pushed the share price above RM2.00 again. I sold out after SEM announced disappointing results for Q42022.

Now BJFood bought 1.07% of SEM from VT who still holds an effective shareholding of 35%+. I really have no idea what game they are playing here.

Something may be brewing in SEM, not sure good or bad, but I am not betting on it.

as I pointed above, if operating costs increase further by 10% in FY2024 Mar, pretax profit of Wessex will increase by (77 - 35) = 42 million pounds. The beauty of this regulated asset business is that such hikes in operating costs will be compensated by future hikes in water tariffs. In this example, Wessex water tariffs will get raised further in April 2024 to compensate for the 10% rise in operating costs in FY2024, such that Wessex will get back the "lost" 35 million pounds of earnings from FY2025.

In summary, whatever increase in operating costs, interest rates or corporate tax rates, Wessex will eventually get back the "regulated" returns for the services it provides. Hence in FY2025, Wessex will get back the increase in pretax profit of 77 million pounds a year.

In its latest Dec 2022 quarter, Wessex registered a pretax profit of RM59 million, annualised to RM236 million or 43.5 million pounds.

Added with the increased 77 million pounds as calculated above, Wessex total pretax profit will get back to 120 million pounds (or RM654 million) a year soonest in FY2024 or latest in FY2025 Mar.

For info, Wessex contributed pretax profit of:
RM746 million in FY2019 June
RM608 million in FY2020 June
RM494 million in FY2021 June
RM374 million in FY2022 June

ok, I will suggest caution in trading... which I am not good at

However, the current stock market is weak now pressured by external factors like the collapse of SVB and troubles in Credit Suisse. I will advise caution in trading and always advocate long term holdings of good stocks like YTLPower which will see increasing profits in next few quarters.

A good entry point looks like at RM0.80 then RM0.72.

hng33 has a better idea on when to re-enter after taking profit around RM0.875.

If operating costs increase by another 10% in 2024, then pretax profit will go up by (77-35) = 42 million pounds and net profit by 31.5 million pounds or RM173 million in FY2024 after incorporating the higher corporate tax.

With the higher RAB now, the revenue increase will be higher than what I calculated above.

For FY2021, Wessex registered:
revenue = 514.71 million pounds
Profit before tax = 83.33 million pounds
Corporate tax = 14.511 million pounds
Effective tax rate = 14.511/83.33 = 17.4%

As can be seen above, Wessex already recorded corporate tax rate lower than the statutory 19% in 2021. I am confident it will register an effective tax rate of lower than 25% for FY2024.

In any event, the effective water tariff hikes of ~15% will increase revenue by 77 million pounds a year. If operating costs remain as in FY2022 which were already elevated, then pre-tax profit will go up by the same 77 million pounds and net profit up by 58 million pounds.

Jeremy Hunt said only 10% of businesses would pay the full rate and anticipated that his new "full capital expensing" policy was equivalent of a corporation tax cut worth an average of £9bn a year.

While the corporate tax rate will be raised from 19% to 25% from 1st April, the full capital expensing policy will help in reducing cash tax for corporates who spend on capital investments. Wessex will incur quite some capex in next year from 1st April, so it will be able to claim tax deduction under such full capital expensing policy. But it is not entirely clear to me whether such policy will overlap or sit on top of the normal capital allowance for tax deduction.

In any event, the worst case impact from the corporate tax hike will be for a ~7.5% reduction in net profit for Wessex. eg. if its pretax profit for FY2024 is 100 million pounds, it will pay 25 million pounds of accounting tax instead of 19 million pounds, so net profit will reduce from 81 million pounds to 75 million pounds, or 6/81 = 7.4% reduction impact.

I had earlier projected a net profit of RM202 million and operating cashflows of RM660 million for FY2022. AEON ended up with a net profit of RM111.2 million and operating cashflows of RM434 million only. The shortfall was due to:

- higher than expected taxation rate of 47.4% for FY2022 vs expected 35%
- substantially higher unallocated expenses of RM120 million vs expected RM87 million
- lower EBIT of RM224m from the retailing segment vs expected RM241m (as a result of thinner margin and higher expenses on digitisation)
- lower EBIT of RM219m for Property Management segment vs expected RM232m (as a result of lower savings in electricity and higher leases)
- substantial increase in capex to RM118.4m in FY2022 from RM67m in FY2021

Though FY2022 revenue actually went up by 4.4% vs expected and by 14% vs FY2021, the management has so far failed to translate the higher revenue into higher earnings mainly due to its ineffective capital/corporate structure and ineffective capex program/IT initiatives.

There is nothing we as minority shareholders can do if the management is happy to pay out almost 50% of earnings to the tax man and pay about RM260 million of lease liabilities payments to other parties. Net Profit will remain low and dividends remain low and no growth ensues.

quietly going up to RM2.70. Love it!

wow 2.04

We should invest in a company with good management that always tries to improve shareholders' value. No matter how much earnings the company makes or how much cash the company has, if the management does not do what is best for company shareholders, eg. spending big on unnecessary capex program that yields no visible result, paying high rentals to third party shopping mall owners, contented with high amounts of debts and serve increasing interest expenses, etc, then there is no point putting your money into such a company stock. You won't see growing earnings nor dividends.

I would rather put my money into other retail companies with net cash position and capable management like Padini who knows how to contain costs and expand at the right time to improve earnings. Even Bonia and SEM do much better than AEON in terms of growing shareholders' value. AEON management is getting too complacent, if it continues going on like that, its market share will sooner or later be eaten up by other retailers.

Rambutan9, the share price movement of Aeon is a reflection of what the company has achieved in terms of financial performance. As I said above, the Q4 qtrly result was a disaster with no visible improvement on any of the areas I suggested before, i.e.
- the high taxation rate
- the increasing lease laibilities
- the accounting policy that capitalises a lot of these lease liabilities
- the weak corporate finance team that fails to adopt sound finance practices
- an uncontrolled capital expenditure program on digitisation which has so far yielded no visible result
- an incompetent management that is not willing and possibly incapable of carrying out material corporate restructuring to a leaner REIT structure that minimises tax and improve cash holdings
- a weak economy and a competitive retail landscape which limits growth
- uncertain external factors and weakening ringgit
- foreign funds pulling out of Bursa

AEON has a good business model and the underlying business generates good operating cashflows. However, without a determined and capable management, the company is going nowhere.

I will only revisit it when there is a change in the management or a change in the attitude of the management, or share price drops below RM1.00.

Furthermore, any imported power will not be as secured as the locally installed power generators which are well spread out across Singapore electricity grid network. Imported power will need new interconnectors with Malaysia or undersea power cables from Indonesia, so in terms of system security and national interests security, such import power is deemed having higher risks. Just imagine if the undersea power cable to Indonesia is damaged accidentally or needs maintenance, then it could risk disruption of 1,000MW to 2,000MW of import power supply to Singapore, and such a 10%-20% sudden power trip may trigger a national blackout.

In the case of PowerSeraya, I see them as having the first mover advantage in importing power to Singapore. They will try to participate in the current power import tender exercise either by having YTLPower to invest in new solar power farms in Malaysia, or by being the aggregator of power import from Malaysia or a combination of both.

This shall make up any shortfall in fossil fuel power generation by 2035.

The license given by the EMA to PowerSeraya was for 30 years, this is same for all other power generators in Singapore like Senoko Power, Tuas Power and Sembcorp or Keppel Power. As long as the power system needs these power generators, the EMA will always extend the license.

Come 2032 thereabout, the EMA will see how much import power the country can solicit then to determine the right energy mix for the country. If Singapore can source up to 4,000 MW of renewable energy by 2035 according to the current tender exercise, such import power will make up about 30-35% of the system total installed capacity + import supply and about 40%-45% of the system peak demand. The EMA will definitely need the big power generators to remain as the backbone supply. By the time, some of the older machines of the existing big power generators including PowerSeraya and Senoko will reach their operating life span, so each power generator will also need to review if they still want to maintain these old fossil fuel generators or repower to newer machines capable of burning green hydrogen, or already expand their import power capacity to make up the shortfall.

Of course, we all hope that the higher tax rates will not be implemented, then Wessex would be able to write back the RM541 million deferred tax charge.

The proposed corporate tax hike from 19% to 25% from 1st April 2023 was announced back in 2021, and Wessex had made a provision for a re-measured deferred tax charge of RM541 million in its June 2021 quarterly result.

If this increased tax rates materialise, then it will hit Wessex immediate profit after tax by 6%.

However, as in the case of high inflation costs, such higher tax rates will be compensated by higher water tariffs possibly in 2024 water tariff adjustment after the higher tax rates have indeed come in effect.

https://www.theedgemarkets.com/node/658591

"The RFP requires non-intermittent supply, the EMA acknowledges the cost of generation and storage technology for variable RE and is willing to consider lower load factor (vs requirements of 75%) in the initial years of supply."

As we know solar power can only generate electricity for few hours a day when there is sunlight, and is notorious for its intermittent supply, hence will need have expensive battery solution to smoothen the power supply throughout the day.

Another solution is to have gas turbines as back-up supply when there is interruption in solar power supply, and PowerSeraya has a few units of gas turbines ready to complement the supply of RE for any importer of RE into Singapore.

hng33, agree with your point. It is better for YTLP to reserve the Kulai land for green data centre park as it is lucrative and secured for long term concession revenue streams.

Also your point is valid for Seraya to act as the importer for power producers in Malaysia like TNB and earn a margin. This way YTLP will not need to spend any capex in buying extra land and building solar power farm separately. Power producers like TNB do not have an electricity retail arm in Singapore and it will be hard for them to sell directly to consumers there. They can sell directly into the electricity wholesale market pool but the pool prices are erratic, which will post revenue risks to them. The best way is for them to sell to PowerSeraya who can then on sell to Singapore consumers via its retail arm Seraya Energy.

wow 56 million volumes today, looks like foreign funds buying as most happened in the afternoon session

ya the cost for 50MW solar farm is about RM150 million only, so the RM1.5 billion capex for 48MW green data centre job consists mainly data centre equipment and facilities with solar power only making up 10% of the total costs.

hng33, the 1st phase of green data centre job undertaken by YTLP is for 48MW only costing an estimated RM1.4-1.5 billion, for which it has secured funding of about RM1.2 billion.
Taking this number for the entire 500MW park, total capex will come to RM15 billion.
Assuming 80% debt funded, equity requirement will be RM3 billion which YTLP has no issue of funding as it has unencumbered cash of RM6.5 billion.

As it really depends on the client of data centre owners as to where they want to locate the data centre. For instance, the recently announced RM25.5 billion data centre project by Amazon subsidiary in Malaysia may be split into several locations. YTLP may then stand a good chance to secure part of this huge job. RM25.5 billion budget is sufficient for 850MW of green data centres, YTLP still has capacity to take up 250MW in its Kulai land. Or it may use another piece of land in Selangor to bid for more.

YTLP has the flexibility of sparing part of the Kulai land for power export to Singapore if there is timing urgency. YTLP has secured 248MW of green data centre park jobs so far, and still has half the land for 250MW of solar power for export to Singapore if it needs to comply with requirements from Singapore in near term.

Then YTLP can take its time to look for another piece of cheap land somewhere else.

MichelleNg, unfortunately YTL shares are suffering from EPF selling but I can see the selling has slowed to just 1.4 million on 6 Mar from 10m on 28 Feb. Hope that EPF selling will stop soon

Not to forget about my forecast for strong earnings rebounds from PowerSeraya who has been reporting higher earnings every quarter in past 1 year. I expect this trend to continue for next few years as the power supply market in Singapore is tight with no visible new supply coming on in next 2 years.

Hopefully, electricity generation gross margin will hit previous 2011-2013 high of S$60/MWh to S$80/MWh in coming quarters.

As I first pointed out in my article in April 2022, export of power to Singapore is a potentially huge opportunity for YTLP, aside from the green data centre park. I am glad that the jigsaw puzzles are gradually falling into place one by one, first got the digital bank license, then secured green data centre jobs of 248MW, then Jordan power plant to start commercial operations in this quarter, Wessex water tariff to get adjusted upwards from 1st April and now government policy to fall into place to facilitate power export to Singapore.

What I understand is that the Kulai land is entirely earmarked for green data centre parks with a total capacity of 500MW, so YTLP will have to look for other land for solar power farm for export to Singapore. And the proposed TPA as in the news articles above will allow power generators to supply power from anywhere in Malaysia and access the national grid for eventual export to Singapore. This means that the potential landbank for solar farm will not be limited to Johor only, and can be in other states north like Perak and Kedah where land is cheaper and sunlight intensity is greater.

That's right. PowerSeraya has the first mover advantage of importing power into Singapore as it is already doing 100MW import now.

But it is still not too late now at 0.865 if one has a long term view, as we expect it to gradually be re-rated to RM1.50 or above by year end.

Insiders who knew about this policy change already scooped up YTL shares in the morning

https://www.theedgemarkets.com/node/658434

Good news for YTLPower. This will pave the way for export of power to Singapore

wow powerful surge of YTLPower will hopefully pull up YTL along

ks55, ya my preference is also for HSR to terminate at Nusajaya JB rather than spending double the money just to extend it to Jurong Singapore.

Save that money and extend the HSR north to Penang better

good call hng33

good call hng33

But without government funding support, it would be a tall order to push through the project which itself may not be feasible. So it will remain a pipe dream for many years to come

It is a real pity that such a great project was cancelled twice by Tun M administration, first in 1998 era when the original proposed cost was just RM15.5 billion for the 350km project, and secondly in 2018 after PH took over and Tun M became PM again. In 2018, the whole project had been fully negotiated with Singapore and the southern portion had been awarded to YTL consortium.

The fact that Singapore government had endorsed and supported the HSR project clearly shows the importance and significance of this project, and the enormous economic benefits it would bring. Unfortunately, it was terminated one-sidedly by Malaysia citing high debts in Malaysia. I fully agree with what Anthony Loke said about the potential revival of this project. If a private consortium can come out and fund it, why not revive it?

It will give a huge boost to the construction and property sector, as well as tourism in future.

I think we should look at the KL-Singapore HSR from a different perspective, it would offer something really different from what we have now. It will be a game changer.

KL-Singapore remains the busiest air routes in the world with over 30,000 flights a year, carrying over 4 million passengers. Air tickets from KL to Singapore are getting expensive as fuel oil prices remain at elevated level above US$80/bbl, especially during holidays/CNY/GE seasons.

It would take just 90 minutes to commute from KL to Singapore and vice versa on a HSR, compared to over 2 hours on flight + waiting time + check-in time and over 4 hours on car or double-track commuter train. Time is of essence for business people, and the short commute time of 90 min for HSR will help them a lot in making day trips. Furthermore they can read and work or rest on HSR, a great advantage over driving on roads.

Of course the HSR fee would not be cheap but should be cheaper than a flight ticket. It would be definitely cheaper to drive a car especially for a family of 2 or more, but if they can save on one night of accommodation if taking HSR, then the overall cost may be cheaper.

One should go and try at least once the HSR in China, it is truly impressive and I would like to see such an option here in Malaysia. Just imagine if we could take HSR from Penang to JB/Singapore for a 3-hour comfortable ride (instead of taking an overnight 9-hour bus), how much time we could save and how much we could promote economic activities and social interaction.

EPF has its own agenda when disposing shares and often the decision is not purely based on merits and fundamentals.

As we see in the case of Astro, EPF sold down its stakes in Astro aggressively after Astro reported a poor set of results in Dec 2022 and ceased to be a substantial shareholder as announced on 13 Jan 2023. Astro share price dropped to rock bottom prices below RM0.60 but today it surged up 20% to RM0.73.

So the lesson is that fundamental prevails at the end of the day and the market will sooner or later appreciate the value of the company

But I am not suggesting anyone to chase it at current price as I suspect any privatisation would not offer anything higher than RM0.75.

Privatisation cannot be discounted as Ananda would need to fork out some RM2.1 billion to buy out the remaining shares not owned by him, and would be entitled to 100% of Astro strong cashflows every year. He may then choose to re-list it few years later once Astro manages to stop the slide in subscribers

Astro operating cashflows are very strong at over RM1.0 billion every year, capex for 2023 should be lower as there will be no major sports events this year hence content costs should be lower by at least RM200m

agree with your view