@Agjl, SWS calculation and fair value are done by AI using data submitted by analysts.

The fair value of RM20.58 given by SWS is based on the following stream of projected free cashflows:

FY2024 - RM2.88 bn
FY2025 - RM2.05 bn
FY2026 - RM4.71 bn
FY2027 - RM6.57 bn
FY2028 - RM8.03 bn
FY2029 - RM9.36 bn
FY2030 - RM10.55 bn
FY2031 - RM11.60 bn

I would say the projected FCF figures for FY2024 and FY2025 are way below the most conservative projection, the FCF figures should be above RM3.5-4.0 billion each year

The figure of RM4.71bn for FY2026 looks reasonable and should be achievable.

The figure of RM6.57 bn for FY2027 is also within reach given the development in YTLP's AI data centre business.

For the FCF figures of RM8.0 to 10.5 bn in FY2028-2030, YTL Power may achieve these if it can secure customers to take up all the 500MW data centre capacity at Kulai.

Before that, I would take the latest submitted FCF figure of RM6.57bn for FY2027 as the firm data, hence the fair value would be about half at RM10.00.

@Agjl, you may just google SimplyWllllStreet and search for YTL Power in stock list

Thanks Agjl for the update.

The fair value is close to what we already argue for.

It is calculated based on decent projection of free cashflows submitted by analysts.

I see the free cashflows figures of RM5.0-6.0 billion a year for FY2025-2026 as achievable.

https://www.ft.com/content/f01c6852-8aa6-4cc0-991d-38f15077ba92

Both Microsoft and Alphabet are spending big on AI data centre this year and in 2025.

https://www.ft.com/content/f01c6852-8aa6-4cc0-991d-38f15077ba92

Both Microsoft and Alphabet are spending big on AI data centre this year and in 2025.

The big jump in fair value there is due to an updated free cashflow figure (~RM6.0 billion) for FY2027 submitted by one analyst, then AI simply uses it to project further growth forward to over RM10 billion after 2030. So the terminal value becomes very high and hence fair value also jump up high.

But I see the free cashflow figure submitted by the analyst as credible, as I myself is projecting for a net profit of over RM5.0 billion and free cashflows over RM6.0 billion for FY2027 for YTL Power.

Guess what the latest valuation of YTL Power given by SimplyWlllStreet?

Fair value for YTL Power is RM20.58 !!!

we should thank Mr. OTB for his relentless promotion and strong believe, plus his accurate technical reading of the chart for the breakup

After a long consolidation of almost 3 months, the break-up is always fast and furious.

It is not my money that you earn, it is your firm believe and own decision that makes you big money. Just pick the right stock and hold it

Happy for everyone here to make money.

At least Hong Leong research is more responsible, calling a SELL on Vitrox, advising retail investors to get out of Vitrox which is trading at 100x PER

See what Maybank research is recommending now - Vitrox

Vitrox announced Q1 24 earnings drop of 50% from last year to only RM17m, yet Maybank is still trying to defend its lofty valuation by projecting for a net profit of RM200m in 2024, I doubt its net profit can even achieve RM100m this year.

At current earnings, Vitrox is trading at forward PER of 100x, yet Maybank maintains a target price of RM7.90 which will be at PER of 105x of annualised earnings in 2024.

Now you can see how cunning some of these local analysts are, making recommendation for own good, bringing retail investors to Holland

YTL Corp is carrying out the construction work for all the data centre jobs at YTLP's Kulai data centre park. That alone will contribute billions of construction order book to YTL.

YTL will be doing the construction for the RM4.5 billion KL WTE plant, which will add another RM2-3 billion worth of construction orders to YTL.

In the research report update yesterday by Hong Leong, it gave an update on YTL Power's data centre business:

i) YTLDC – a 500MW capacity of green data centre plan over 10 years (depending on demand). We understand the first phase of the planned 48MW DC1 (mainly for Shopee) will begin contributing in 4QFY24. YTLDC has also started construction for DC2 (estimated 100MW) for AI cloud infrastructure (under YTLCom) and is working on next DCs in the pipeline (potentially 100MW each) for potential clients. When the segment matures, the earnings contribution could be in the tune of billions and we do not discount potential monetisation of the assets.
ii) AI-DC – estimated 100MW, collaborating with NVidia for technology and support (under YTLCom). We understand the first stage will be utilizing NVidia’s H100 chipsets and the subsequent stage will be utilizing NVidia recently launched GB200 chipsets. We understand that YTL will be one of first deployment of GB200 globally (given priority by NVidia), thereby resulting strong demand for YTL’s AI infrastructure. Given YTL’s strong balance sheet, we reckon it could become NVidia’s go to partner for ASEAN expansion.
iii) RE ventures – 500MW LSS to support YTLDC’s green powered capacity with further growth opportunities for potential RE export growth. Up to 122.5MW WTE to be co-developed with KDEB.

DC1 for SEA Ltd is already completed and will start contributing earnings from April 2024.

DC2 (est. 100MW) for AI cloud infrastructure is already under construction and should start contributing big earnings from early 2025.

YTL Power is working on other DCs in the pipeline (est. 100MW each).

From this update, it is reasonable to project for at least 200MW of AI data centres to be built at Kulai over next 3 years.

In the research report update yesterday by Hong Leong, it gave an update on YTL Power's data centre business:

i) YTLDC – a 500MW capacity of green data centre plan over 10 years (depending on demand). We understand the first phase of the planned 48MW DC1 (mainly for Shopee) will begin contributing in 4QFY24. YTLDC has also started construction for DC2 (estimated 100MW) for AI cloud infrastructure (under YTLCom) and is working on next DCs in the pipeline (potentially 100MW each) for potential clients. When the segment matures, the earnings contribution could be in the tune of billions and we do not discount potential monetisation of the assets.
ii) AI-DC – estimated 100MW, collaborating with NVidia for technology and support (under YTLCom). We understand the first stage will be utilizing NVidia’s H100 chipsets and the subsequent stage will be utilizing NVidia recently launched GB200 chipsets. We understand that YTL will be one of first deployment of GB200 globally (given priority by NVidia), thereby resulting strong demand for YTL’s AI infrastructure. Given YTL’s strong balance sheet, we reckon it could become NVidia’s go to partner for ASEAN expansion.
iii) RE ventures – 500MW LSS to support YTLDC’s green powered capacity with further growth opportunities for potential RE export growth. Up to 122.5MW WTE to be co-developed with KDEB.

https://www.straitstimes.com/singapore/first-major-construction-tender-for-changi-airport-t5-launched-in-march-chee-hong-tat

The launch of this major construction tender will be very good for MCement business in Singapore

https://www.straitstimes.com/singapore/first-major-construction-tender-for-changi-airport-t5-launched-in-march-chee-hong-tat

The launch of this major construction tender will be very good for YTL's cement business in Singapore

@Planterman, I don't think i3 admin will allow me to post the link.

If you want the pdf file of the report, please pm me in i3

Hong Leong released a research report on YTL Corp with a Buy call and target price of RM3.33, a 20% discount to SOP valuation of RM4.17.

The research house reiterates a target price of RM5.55 for YTL Power.

In page 4 of the report, it tabulates the Singapore benchmark retails contract prices by SP Services. The table clearly shows that the retail contract prices remained stable at SGD 32.47 cents/kWh or SGD324.70/MWh for April-June 2024, compared to SGD 32.58 cents/kWh in Jan-Mar 24, SGD 31.00 cents/kWh in Oct-Dec 23, SGD 29.96 cents/kWh in Jul-Sep 23, SGD 29.62 cents/kWh in Apr-Jun 23 and SGD 31.27 cents/kWh in Jan-Mar 23.

The current tariffs are almost the highest in past 2 years. It reinforces my view that PowerSeraya will continue to report good profits in coming quarters, as opposed to what some local analysts claim to drop by half by 2026 (which is bullshxt to me).

Hong Leong released a research report on YTL Corp this morning with a Buy call and target price of RM3.33, a 20% discount to SOP valuation of RM4.17.

YTL has performed momentously with strong earnings delivery since our initial report in Sep-23. We believe YTL remains undervalued with strong potential upside, leveraging onto key catalysts from (i) utilities (YTLP) – sustaining SerayaPower & APCO earnings, turnaround of Wessex and new growth from DC development; (ii) construction – from both external (including HSR and MRT3) and internal projects (e.g. data centre and LSS); and (iii) cement (continued strong demand from current projects and upcoming mega projects in the pipeline). We derive a fair value of RM3.33 (from RM2.10) on YTL based on 20% discount to SOP: RM4.17, with further potential upside.
Strong delivery. Since our first report in Sep-2023, YTL has delivered strong earnings performance in recent quarters with share price run-up above our initial fair value. After recent management updates, we remain upbeat on YTL’s outlook and we have revised upwards our fair value to RM3.33 (from RM2.10) based on Sum-of-Parts valuation.

When you do a check on the valuation of KLCI 30 component index stocks, you will find that most of them are trading at PER of over 15x, many at over 20x with dividend yield of less than 3%. But they still get local funds' support just because they are GLCs and local funds have substantial holdings in each of them.

But local funds are also under pressure to perform, otherwise the fund managers will be out of the job. When they check through the big caps in Bursa, they will find that YTL Power is among the cheapest stock. Once they get comfortable with the fact that YTL Power earnings will stay resilient over next few quarters, they will think YTL Power is trading at unjustifiably low valuation and gradually accumulate the shares.

When more funds think the same, and as YTL Power grows further as new earnings stream kicks in, the valuation becomes even cheaper and more funds will then rush in to buy. It is the fear of losing out (FOLO) that will drive the share price higher.

This situation will become more apparent when YTL Power announces a good news (likely in coming weeks) or another set of good results in May end, foreign funds will jump in again to scoop up the shares.

@Raymond, yes the stock market is forward looking. For Tenaga's current PER of 25x to fall to 15x, its earnings will have to increase by 67% by 2025. Now you need to make an assessment as to whether this is possible or not. Tenaga business is in the steady power generation and transmission, with the 1%-2% electricity demand growth in Peninsular Malaysia and with the electricity tariffs fixed, how could Tenaga possibly increase its earnings by 67% in one year??

I seriously doubt it.

One of the reasons why YTL Power is only trading at forward PER of just 10x is because local analysts play down on its earnings growth, eg. some always use the excuse of "normalisation" of PowerSeraya earnings by 2026 without giving much detailed calculation to justify the low earnings projection. The reason why local analysts play down on YTL Power earnings prospects and valuation is mainly because most of them missed out on the share price rally of YTL Power and completely wrong footed on the explosive earnings growth of PowerSeraya. Some of them have even advised local funds like EPF to sell off YTL and YTL Power shares. So now they cannot be seen as slapping their own face by projecting good earnings prospects of YTL Power and giving a high target price.

But things are changing now as local funds seem to be ignoring these local analysts' recommendation and started accumulating shares of YTL Power since March 2024.

Some of these local analysts are becoming the "Buy" call advisors to the local funds, and will soon upgrade YTL Power to higher targets once their clients have accumulated enough stocks.

To me, there is no reason why YTL Power should be trading at a low PER of 10x. I would argue for a fair PER of 15x for such a big cap with strong earnings growth.

To take note is that the long term average PER of US stock markets is 15x and the long term average PER of Bursa component index stocks is 15x to 20x.

I am taking the lower end of the Bursa average PER range.

Don't get me wrong, KSL is a good company. I did buy some of its shares for long term investment as I believe eventually KSL management will realise how important dividend payouts are to the company as a listed one and to shareholders.

After all, we invest in listed company shares only for 2 purposes - to get dividends every year and to enjoy any share price appreciation.

If a listed company does not declare dividend but keep all cash to itself and to its directors, the share price will not move and minority shareholders get nothing.

For YTL Power, we can expect higher dividend payouts for FY2024 and beyond as the company profits scale new record highs.

@Raymond Tiruchelvam, I do not see any other big cap trading at 10x PER, most are above 20x PER. Please let me know if you find any. Hence it is unjustified for YTL Power to trade at 10x PER for a company that earns over RM3.0 billion a year and growing big in next 2 years.

Don't compare it to the small caps, some are trading at PER of 10x or below due to various reasons - earnings boosted by one-offs, small cap, not liquid, management not proven etc.

I also can find one - KSL which is a smaller cap property developer. The reason it is trading at just 4x PER is because the company has not declared any single sen of dividend since 2015, while the company directors are getting bigger pays every year.

YTL Power is different, it is a lot bigger with market cap of over RM32 billion, almost within the top 10 big caps in Bursa. It has consistently declared dividends over the years, non-stop even when the company was making little profit in 2017-2020. During Covid years , the company directors did not get any bonus, some more willingly took a 10% pay cut. More importantly the management continuously innovates to diversify and bring in lucrative deals to make the company profits scaling new heights year on year, as we have seen for FY2023 and FY2024. FY2025 will be another record year in profits. And I project new record earnings for FY2026, FY2027 and well into FY2029 when PowerSeraya's new 600MW hydrogen ready CCGT is operational.

I retain my view that YTL Power remains the cheapest big cap in Bursa with forward PER of around 10x only, compared to PER of well over 20x for other utilities stocks such as Tenaga and PetGas.

I think local analysts will find it harder to justify a fair value of RM4.00-4.20 for YTL Power going forward, especially when Tenaga share price has broken new high, and as YTL Power delivers another set of resilient earnings for Q3 FY2024.

I echo Mr. OTB's view on YTL Power share price movements, it should break new highs in next few days or weeks.

On the other hand, after studying the report by CLSA and doing more detailed calculations, I find that the EBITDA margin for YTLPower's AI data centre business can be as high as 84%. This is higher than the typical range of 65%-80% as YTLP enjoys lower electricity prices (lower if it installs more solar power at the site) and water costs, compared to other countries like Singapore.

@cktay, I am not sure where in Bursa website we can get such data, but I got it from Hong Leong research daily reports.

https://www.forbes.com/sites/richkarlgaard/2024/04/21/electricity-wars/?sh=2ecd5de47abd

What changed? Two things. One was “transformer”—a new AI language model that emerged from Google Labs in 2017 and made today’s generative AI possible. Two is the sheer processing power of Nvidia’s chips. The new Blackwell chip has 208 billion transistors. Nvidia says Blackwell can support a 27 trillion parameter model, a gigantic leap in processing power from what’s available today. One of the first deployments of Blackwell will be in Malaysia, powering a supercomputer created by YTL, the Malaysian business group run by Francis Yeoh, who shares a $1.4 billion fortune with his siblings.

https://www.forbes.com/sites/richkarlgaard/2024/04/21/electricity-wars/?sh=2ecd5de47abd

What changed? Two things. One was “transformer”—a new AI language model that emerged from Google Labs in 2017 and made today’s generative AI possible. Two is the sheer processing power of Nvidia’s chips. The new Blackwell chip has 208 billion transistors. Nvidia says Blackwell can support a 27 trillion parameter model, a gigantic leap in processing power from what’s available today. One of the first deployments of Blackwell will be in Malaysia, powering a supercomputer created by YTL, the Malaysian business group run by Francis Yeoh, who shares a $1.4 billion fortune with his siblings.

I state it below again for your easy reference.

Jawa Power and Jordan Power - earnings will be steady at RM120-150 million PBT a quarter
PowerSeraya - estimated at SGD180-200 million net a quarter

PowerSeraya earnings will be slightly lower than Q1-Q2 FY2024 due to lack of extra long generation gain from selling into the pool and gradual falling off more lucrative retails contracts locked in during the pandemic

@cstanmyinvest, I believe I have said here numerous times before that the USEP fluctuations have little impact on PowerSeraya earnings as over 95% of its electricity sales are locked in retails and vesting contracts. The exposure to the wholesale pool market is small, yet the extra long generation gain can be substantial when the pool prices are high as we saw in Jan-June 2023 when PowerSeraya managed to realise extra generation gain of SG$20-30m a quarter by selling into the pool at high USEP.

For better understanding of how the merchant electricity market in Singapore works, please read one of my previous posts which detailed how the market works.

YTLP power generation includes generation business in Singapore, Indonesia and Jordan. You need to assess the earnings potential of each asset. Pls read my earlier posts and comments in this forum for more info.

@estk, I do not know where in Bursa website the daily traded data is extracted from.

I got the data from Hong Leong research daily reports.

Local institutions net bought RM25 million worth of shares in YTL last Friday alone, and local retail investors were the only net sellers, being spooked by Middle East tensions.

It is a waste for local retailers to have sold off YTL shares which are still cheap at forward PER of only 12x, compared to Tenaga's 18x PER, PEtGas 25x PER, Sunway 21x PER.

Foreign funds collectively bought a total of RM24 million worth of shares in YTL Power last Friday 19 April, and local institutions bought another RM18 million worth of shares in YTL Power.

Only local retail investors sold YTL Power last Friday, being spooked by Middle East tensions and naysayers in this forum. What a waste!

@Agjl, I cannot share the full report here as i3 admin does not allow it.

If you want, just pm me in i3 messenger and I will send you the pdf file

CLSA upgraded YTL Power today to a BUY with higher target price of RM5.10. Some extracts from the research paper:

YTL Power: a proxy play to Nvidia, upgraded to BUY; we prefer it over YTL
- YTL Power, among a select few with priority to Nvidia’s latest chips, stands to gain on
the hastened rollout of capex (we estimate RM16bn). We introduce AI segment
valuations (earlier ascribed co-locator valuation), which lifts our target price to RM5.10
for YTL Power and to RM2.88 for YTL, but lower YTL’s rating from BUY to O-PF on price
action. We raise our earnings forecasts by 10-28% for YTL Power and 12-26% for YTL
over 25-26CL to account for the AI segment impact.

- Assuming a blue sky scenario, fair valuation could rise to RM6.60 for YTL Power (on a
150 MW rollout). YTL Power leveraging on Nvidia to scale shields against over-capacity
risk in non-AI datacentre demand.

@Apple888, CIMB target price for YTLP is RM4.50

CIMB analyst must be careful and responsible in her earnings projection as many local funds are buying into YTL Power now, otherwise she will go against the interests of these local funds who are clients of CIMB Investment Bank

CIMB analyst has definitely overplayed the "normalisation" of PowerSeraya earnings. She will have to upgrade YTLPower earnings projection after the company delivers another set of strong earnings in coming quarters.

@JMpower, as I wrote in my last post on YTL & YTLP, I think it will be fair to attach a PER of 20x for a well diversified conglomerate like YTL, hence a target price of RM4.00.

If YTL wins the HSR, then the upside is a lot bigger.

I think as the major shareholders are also the top management, the management style is naturally more conservative and the management is not bothered much with share price fluctuations. Unlike those companies which are run by professionals employed from outside and the CEO's remuneration is linked to the share price performance, KSL is run by the major shareholders so they are in for the long term gains of the company.

Though they are not bothered much with short term share price fluctuations, but it is always important to maintain the company share price at a healthy level, because after all the whole purpose of doing the listing is to raise money for the company, hence if the share price remains depressed, it defeats the purpose of listing.

I think it still makes sense for KSL to remain listed as the company will still need to raise fresh funds for future land acquisition or new commercial projects.

What I have proposed above will be good for the long term gains of the company as well as short term share price appreciation, so I hope the KSL management will consider them.

@Invest_888, I would like to meet the Khoo/Ku brothers/directors if they are willing to receive me. Even without doing so, I believe the KSL major shareholders and management know what to do best for the shareholders as it will be in their own interests too.

The IBs are at work pressing down the share price ahead of call warrants expiring next Friday and April end, so the share price will probably be capped til April end. Nothing much to share and write before then.

share price is under selling, and so I will stop writing anything until it stabilises.

The bear has got the upper hand for now.

If you are not comfortable with the current share price level, just sell off and move over to other counters, and not talk non sense here.

Newbies are also not advised to buy into this counter now if they are not comfortable with the strong price rally in past 1 year.

YTL Power is still very much undervalued, despite the strong rally in share price in past 1 year.

I particularly disagree with the notion by some parties that YTLP is over-valued, as they are not able to come out with any figures to show. Whatever valuation matrix you use, and whichever big cap you use to compare, YTLP is way under-valued.

If it were over-valued, the share price would have fallen to RM3.00 or below. Why after over 2 months of hitting the peak of RM4.24, the share price still could hit RM4.17 earlier this week? And the buying volume on that day was very high, estimated to be over 10 million shares that bought into the stock from RM4.05 to RM4.17. That was not the kind of volume either you or me or any retail investor could buy. Hence I suspect it was by some local funds.

I always think that i3 is a platform for us to share useful information among retail investors so that we get more clues on which stocks to buy ahead of the foreign funds and local funds.

What we write and post here does not have any impact on the share price of big caps like YTL or YTL Power, as the shares traded everyday are in tens of millions. What we buy or trade hardly moves a needle.

But for small caps like KSL or Crescendo, share price may move fast even only retail investors are trading the counters, so we must be more responsible in what we post.

Hence I find it strange for some parties trying to talk bad on YTL Power in this forum, as such effort will come to nothing. On the other hand, what I write here also will not have any impact on YTLP share price, no matter how I promote it.

What I am trying to do is just give a reasonable projection on what to come for YTL and YTL Power based on my own analysis on how earnings outlook will be and how the market may value it, hence my projection for 15x PER eventually.

It may or may not achieve that kind of valuation, as it also depends on foreign fund flows in and out of Bursa (which itself depends on a lot more other factors like US Fed interest rate cycle, ringgit movement outlook, the country fiscal positions and policy, any external black swan events etc.) and whether the company and each of its subsidiary can perform as expected.

Based on my years of following the company's management and corporate moves, I have reasons to believe that the company will do well in the near to medium term looking at the various initiatives it has undertaken. Hence I will just hold onto what I have on YTL and YTL Power without taking any profit as yet, as it is hard to find another big cap stock which has as good prospects as YTLP and YTL.

I just quote what Warren Buffet has said, he is "quite content to hold any security indefinitely, so long as the prospective return on equity capital of the underlying business is satisfactory, management is competent and honest, and the market does not overvalue the business."

I believe the prospective return on capital for YTLP is good and improving in next 2-3 years, and always believe the the management is competent in what they are doing, and think that the stock is not over-valued, so I just hold on until it rises above what I think it has become over-valued, or else I just keep them as long term dividend stocks.

As such, I would advocate for rational and responsible postings here, and for long term investments. And we should always be open to more investment ideas like PBA (which suffers a temporary setback now) and Crescendo / KSL now, though I did miss out on SP Setia at below RM1.00.

See it is absolutely possible for some of us as retail investor to beat the market and foreign / local funds, eg. we bought into YTL at RM0.52+, YTL Power at RM0.70-1.10, Crescendo at RM1.50, KSL at RM1.00-1.50 way before funds came in.

Finally, I welcome anyone who can share good info on any stock that you think will fly, so that we can all make money together.

Remember it is not a zero sum game among retail investors here, we are here to win money from funds by buying good stocks low ahead of funds and sell high to funds when they realise the deep values of the stocks we invested in.