Even if I take a 50% discount to regional data centre valuation, YTLP's 1st phase data centre will be worth RM2.8 billion or RM0.35 per share of YTLP. YTLP should be worth RM4.90 per share based on SOP valuation above.

Just imagine when YTLP fully develops the 500MW green data centre at Kulai, how much value it will add?

There are a several weak points in Hong Leong SOP valuation of YTLpower:

1) Wessex Waters' RAB has expanded to over 3.6 billion pounds, at 1.20x RAB, Wessex should be worth ((3.6 x 1.2) - 2.4) x 5.90 = RM11.3 billion, some RM1.2 billion higher than HL's value

2) PowerSeraya should deliver net profit of at least SGD760m a year for next 2-3 years. At PER of 10x (similar to that of Sembcorp and Keppel), PowerSeraya should be valued at SGD7.6 billion minimum. Minus net debt of SGD1.0bn, PowerSeraya should be worth SGD6.6bn or RM22.8 billion, some RM4.6bn higher than HL number

3) Attarat Power is expected to contribute earnings of RM400-500 million a year to YTLPower for next 30 years. Hence it should be valued at at least RM4.0billion to RM5.0 billion whether on PER or DCF method, doubling of what HL has valued

4) YTLP has an estimated net cash of almost RM2.0 billion at holding level, but HL has got it wrong at net debt of RM5.6 billion, a difference of RM7.6 billion

5) HL has not given any value to YTLP's green data centre business. As pointed out earlier, at NEXTDC valuation or Singtel's disposal of its regional data centre business to KKR at around USD35 million/MW, the 1st phase of 48MW data centre of YTLP should be valued at USD35m x 48 = USD1.68 billion or RM7.8 billion Enterprise Value. Minus out debt of RM1.1 billion for the 1st phase, the equity value should be worth RM6.7 billion.

With these 5 differences above, HL has under-estimated a total of RM22.3 billion or RM2.75 per share.

If added with this, the SOP valuation of YTLP should increase to RM3.23 + 2.75 = RM5.98 per share. Minus 10% holding discount, YTLP SOP value should be around RM5.38.

Hong Leong re-iterates tp of RM2.90 for YTLPower using sum-of-parts valuation.

It projects a net profit of RM2.0 billion for YTLP in FY2024. I think Hong Leong has under-estimated the following:
1) it has totally omitted earnings contribution from Attarat Power associate, by only recognising contribution from the O&M company and shareholders' loans. There should be potentially an additional RM200 million of profit to be recognised from the JV every year
2) Hong Leong may have under-estimated earnings contribution from PowerSeraya which alone should deliver at least RM2.07 billion net profit to YTLP in FY2024 & FY2025
3) Hong Leong has not included any earnings contribution from green data centre business

YTLP should be able to deliver net profit of around RM3.0 billion in FY2024, which will pose an upside of 50% to Hong Leong's projection. Once it manages to prove that in late Nov with the Q1 FY2024 result, I believe the analysts will upgrade their earnings projections for YTLP

Hong Leong research releases an update report on YTL Power today after a meeting with the management. Key updates are:
1) YTLP management guided for earnings sustainability for next 3 years
2) PowerSeraya earnings for FY2024 will be stronger, driven by tight market supply, high locked-in retails margin and secured long term cheap LNG supply
3) The 45% asscoiate Attarat Power in Jordan will contribute total RM300 million earnings in FY2024 from operations & maintenance and interests from shareholders' loans
4) YTLDC will roll out total 500MW of green data centre over next 10 years with total investments of RM15 billion. The 1st phase of 72MW is under construction (48MW secured with SEA Group) and will start contributing earnings in early 2024.
5) The development of 500MW LSS with SIPP at Kulai site will primarily to support the green data centres there. In addition to this, there will be opportunity to roll out more solar power for potential RE export to Singapore as well as to meet demand in Malaysia under NETR
6) The development of WTE plant with KDEB with 58MW power output expandable to 122.5MW at later stage will ensure longer term earnings growth for YTLP

https://www.thestar.com.my/business/business-news/2023/09/19/singtel-to-sell-20-stake-in-data-centre-business

Singtel is selling 20% of its data centre business to US KKR Group, valueing its data centre assets (total 155MW) at US$4.0 billion or S$5.5 billion. This is slightly lower than the market cap (AUD6.45b or USD4.1bn) of NEXTDC Ltd who owns 120MW of data centres.

Using this valuation matrix, YTLP's 1st phase of 48MW data centre should be worth some US$1.0 billion to US$1.3 billion Enterprise Value (EV).

I think the market has generally not yet factored in the potential of data centre business in YTLPower share price. Let's wait for Q3 or Q4FY2024 result to be out to see how much earnings the 1st phase data centre will contribute to YTLPower, then I believe the market will re-rate the share price upwards.

RHB has seriously under-valued the data centre business, by projecting a value of just 13 sen per share addition to YTLPower valuation for a 300MW data centre asset.


For comparison, a listed data centre player, NEXTDC Ltd in Australia with 120MW data centre has a market cap of AUD6.45 billion or almost RM20 billion!!


Posted by xiaochen > 27 minutes ago | Report Abuse

柔太阳能料加速发展杨忠礼电力目标价上调
https://www.sinchew.com.my/news/20230918/finance/4993949

Another married deal - 95 million shares changed hands at RM2.08 last minute today.

No wonder YTLP share price slided back in the afternoon, bcoz the deal was agreed at RM2.08. Hapseng share price also had some 30 million shares changed hands last minute today.

Looks like some funds are preparing ahead of next Monday when these 2 stocks will welcome more foreign funds buying.

Crude oil prices are at 2023 year high, matching towards US$100/bbl in near term.

High oil prices will have two positive effects on YTLPower:
1) it will promote a more favourable outcome from the Jordan arbitration case
2) PowerSeraya will have higher profit margin as it has locked in cheaper gas supply for 2 years

@cgtan2020, I wish them good luck!

AUD30 billion for a 1.7GW solar power export project from Darwin to Singapore?? That's over 17x the cost of installing solar power in Peninsular Malaysia.

This is my personal assessment from recent developments. You need to make your own assessment as to whether the recent developments will affect your holding on YTLPower.

RE players who export to Singapore will need to face the risks of electricity sales in terms of both the volume and pricing as Singapore market is competitive wholesale market. It means that even though these RE developers can generate solar power in Indonesia or Sarawak but they have no certainty of selling all of the solar power generated into Singapore if their bidded prices are too high or they do not get their offer strategy right. This is especially so when gas prices are low and baseload gas plants can break even at electricity prices as low as S$50/MWh which will not be sufficient for RE importers to make any profit. Under such circumstances, RE producers would find themselves fully loaded with solar energy stored in battery storage but not able to sell it into Singapore market due to pricing or hedging strategy (or lack of).

On the contrary, solar power producers in Malaysia will likely be awarded a long term contract similar to those awarded under LSS tenders, which will allow them to make decent returns with certainty of volume offtake and pricing.

This is evident from the fact that RE players in Semenanjung Malaysia (like Tenaga/ Malakoff/YTLP) have not been too keen in pursuing RE export to Singapore. We have only seen news on RE players trying to export from Indonesia and Sarawak.

It could be also due to fierce competition there in Singapore RE import, and also partly due to our government's aggressive RE plan for next few years. Both Malaysia and Singapore governments are essentially fighting for the same pool of money from private RE players.

Now things are looking more positive in Malaysia after the government rolled out the National Energy Transformation Roadmap (NETR). The government is pushing hard on new RE projects in Malaysia with a targeted total solar power installed capacity of 7GW by 2030 and 56GW by 2050, from currently only 3GW.

That means that are potentially 4GW or 4,000MW of solar projects up for grab by 2030 and another 49,000MW potential in next 2 decades. These are astonishing targets which offer lots of opportunity for every RE player here including Tenaga and YTLPower. I expect YTLP to grab some 300-500MW of solar power by 2030.

last time when there was limited RE projects as the government limited new solar capacity to 500MW to 800MW each year in its LSS tenders, RE players were very aggressive in bidding for the solar projects under LSS tenders and hence the winning price was too low until some of the RE winners could not achieve financial close as solar panel prices went up.

Now the demand for solar is so great - 4000MW by 2030 or 600-700MW solar projects up for grabs every year until 2030, then almost 2,000MW solar projects to be rolled out every year from 2031 to 2050. The pie is big enough for every RE player, big or small. Hence the price will not be as competitive as in previous LSS tenders and it will allow each RE player to earn a decent return so that each project can achieve financial close and go ahead.

I was positive of YTLP getting a slice of the RE export to Singapore when EMA announced the plan of importing 4GW by 2035, but as things evolve I am now less keen to see YTLP exporting RE to Singapore.

I am more of hoping PowerSeraya to defend its market share by running the efficient gas plants as baseload units (as RE import is sometimes irratic depending on weather and undersea conditions), capitalising on cheap gas supply to be secured now and then, and ramping up its retails electricity arm to create a strong customer base so that it may forge some sort of cooperations with the RE producers who do not have retails presence in Singapore. This way, PowerSeraya will be able to survive by running decent load factors as baseload plants (as existing plants are largely depreciated) and capturing some of the upside from selling RE import to its retails customers.

@ltlim74, the competition will only get fierce for RE import to Singapore as external parties generally view this as a good lucrative contract to enter the electricity market there. But most of these external parties are not well versed with how the competitive market works there. It is the same situation as in 2012-2013 when Singapore government introduced LNG into the market and various parties scrambled to subscribe to LNG supply. Hyflux and Pacific Light were ones of them, and all suffered losses in subsequent years. The heavily debted companies like Hyflux went bust and assets taken over by PowerSeraya.

It may look good for external companies to get a slice of the RE import purely looking at the electricity price difference in Singapore and in Malaysia/Indonesia. Often these companies overlook the risks associated with the export of RE and uncertainties with the selling price and volume, as well as the risk with RE production which depends very much on weather conditions. I would think that the first movers who bring in RE into Singapore may earn some money in the first 1-2 years then they may start realising that the margin will not be as great as they thought initially as the market is flooded with more RE import. We may see more RE players dropping out as they simply cannot get their RE project financially closed as bankers see the weakening electricity prices. Eventually if EMA gets aggressive in promoting RE import, then eventually what they might get would be a temporary over-supply situation followed by failed projects and lack of interests in investments for years to come.

I think we do not need to be too worried about the RE import into Singapore from Indonesia. In fact, this was well expected as Singapore already announced its target of importing 4 GW of RE by 2035. The closest countries to Singapore are Malaysia and Indonesia, so it is not a big surprise for Indonesia to get the lion share of the pie as Malaysia still banned RE export until recently.

Furthermore, this is only conditional approval, and by usual practice, EMA typically grants approval for more projects at initial stage in anticipation of some projects failing to achieve financial close and go ahead. So it would be very good if Singapore eventually gets 1,500MW from Indonesia. The 1,000MW RE import from Cambodia by Keppel via 1000km undersea power cables is even more far stretched, with costs unknown.

I suspect these projects from Indonesia will eventually need to go through competitive RFP process as usual, and solar power projects from Malaysia will still have cost advantage over those from Indonesia. In any event, I still expect minimum of 1,000MW to 1,500MW solar power export from Malaysia to Singapore.

Furthermore, Malaysia government is pushing for ambitious RE plan over next 15-20 years, and there is potential of over 5GW solar power projects up for grabs in Malaysia by 2030. YTLP is in a good position to grab some of it.

Based on info from EMA press media release, the RE import from Indonesia shall commence from end 2027, so the electricity market in Singapore will continue to be tight for next 2 years, i.e. PowerSeraya will continue reporting good earnings for FY2024 and FY2025. Depending on the peak demand growth in Singapore, PowerSeraya may continue posting good earnings for FY2026 and FY2027 if demand growth is as high as EMA projected.

All in, I still expect YTLP to report EPS of 40 sen (PAT of RM3.2b) for FY2024. At PER of 10x, YTLP should trade up to RM4.00. Even if I knock off 10% profit to allow for continued weak earnings from Wessex into Q3 FY2024 and lack of extraordinary profits from PowerSeraya/Jordan, YTLP should trade up to RM3.60 in 2024.

Posted by cgtan2020 > 1 day ago | Report Abuse

https://www.ema.gov.sg/news-events/news/media-releases/ema-grants-conditional-approvals-for-2gw-electricity-imports-from-indonesia

Pacific Medco Solar Pte Ltd, formed by PacificLight Renewables Pte Ltd, Medco Power Global Pte Ltd and Gallant Venture Ltd 0.6GW
Adaro Solar International Pte Ltd., formed by PT Adaro Clean Energy Indonesia 0.4GW
EDP Renewables APAC 0.4GW
Vanda RE Pte Ltd, formed by Gurin Energy Pte Ltd and Gentari International Renewables Pte Ltd 0.3GW
Keppel Energy Pte Ltd 0.3GW

@cgtan2020, I don't quite agree that utilities stocks rarely trade above 10x PER. Just look at below stocks:

Tenaga - PER 11.5x DY 4.8%
Petronas Gas -PER 18.9x DY 4.2%
Ranhill Utilities - PER 15.9x DY 4.1%
Press Metal - PER 26.6x DY 1.5%
Malakoff - loss making DY 3.4%
MAHB - PER 18.9x DY 2.9%
Dialog - PER 23.4x DY 1.6%

@cgtan2020, this TPC data just shows that the TPC cap price has increased to S$584/MWh in 16-30 Sept from S$500/MWh in 1-15 July, as the gas prices have gone up so the spot LRMC price has gone up in tandem.

It does not mean much to Gencos' margin. But as far as I know, the supply is still tight and spot USEP still hit TPC cap price on several occasions in Sept.

YTL just injected a 5-star hotel into YTL Hosp REIT for RM138 million, and will realise a disposal gain of over RM80 million and get cash proceeds of RM138 million.

This is part of its monetisation program, expect more to come. Next could be a hotel/resort in Niseko Japan. SO far only Hilton Niseko has been injected into the REIT, there are 4 other hotels/resorts there already achieved steady occupancy rates and income.

YTL launched its latest collection, Mandala Club Niseko last month, on track to add one or 2 new hotel/resort at Niseko every year.

@hoplanner, YTLPower-C33 is a call warrant issued by CIMB with conversion price at RM1.65 and conversion ration of 1.5.

Upon expiry, this call warrant will be cash settled by CIMB. If YTLPower is at RM2.55 then YTLPower-C33 will be settled at
(2.55 - 1.65)/1.5 = RM0.60 per warrant.

@jeffchan1901, conventional warrants always rise in tandem with the mother shares, but there are other types of alternative warrants which may do the oppposite.

Conventional warrants are issued by the company itself to raise equity money when warrant holders exercise the warrant to convert into mother shares, often 1 warrant to 1 mother share. The tenor of these conventional warrants are long at 5 years typically.

Call warrants are issued by broker houses like CIMB or Maybank or Macquarie Bank, and not issued by the company itself. eg. YTLPower-C33 is a call warrant issued by CIMB at conversion ratio of 1.5 call warrant to 1 mother share. But these call warrants are not exercisable nor convertible to mother shares, but are cash settled at expiry which typically falls within 6-9 months of issuance. Call warrant prices rise in tandem with the mother share according to the conversion ratio, eg. YTLP-C33 will rise 2 sen if the mother share rises 3 sen.

Put warrants are opposite of call warrants, in that their prices fall when the mother shares go up.

Perhaps when YTLP mother share rises above RM4.00 next year and dividend yield falls below 3% then only the issuance of a 3%-coupon bond would appeal to investors then.

furthermore, who would subscribe for the 3% coupon bonds while they can buy the mother shares to enjoy over 7% dividend yield and almost 100% capital gain in next 2 years??

You buy redeemable bonds only to get a fixed coupon of 3% without the chance to ride on the common stock potential capital gain, as the bonds will be redeemed at cost upon expiry.

taking the examples above, a 1-for-4 free warrant issuance will give away 2 billion free warrants to existing YTLP shareholders, which will be worth RM2.00 each warrant when the mother share rises to RM4.00 later in 2024-2025. So each existing YTLP shareholder will get 250 shares of free warrant which will be worth RM0.50 for each YTLP mother share held.

And these new warrants will raise equity money of RM2.00 x 2bn = RM4 billion to YTLP in 5 years, which will come in handy to replenish its cash holdings.

@cgtan2020, the company needs to pay back the money to bond holders of any redeemable bonds issued, it is not free money. The company will need to pay a fixed coupon to bond holders every year, before redeeming all of them at principal sum, i.e. YTLP will need to get RM2 billion cash ready to redeem the bonds in 5 years time if the company issues RM2bn worth of bonds now, on top of paying RM60 million of coupons every year to bondholders.

I don't see the need of doing such at the moment, as YTLP is not short of cash.

But a free warrant issuance will be highly positive for the company and the share price.

@hoplanner, I am not sure what you meant. YTLP has secured debt funding of over RM1.1bn for the 1st phase green data centre at Kulai, the balance was funded by equity money.

SEA group has committed to take up 32MW minimum of the first phase data centre, which means they will pay concession fees to YTLP for this portion of the project. Don't get mixed up with the debt/equity funding of the project.

@cgtan2020, the capex requirements for the WTE plant and the secured 200MW green data centre parks (after the 1st phase 48MW fully funded already) at Kulai will be about RM900m and RM1.2 billion respectively over next 3 years.

YTLP has some RM1.0-2.0 billion net cash at holding level based on my rough estimates, and will have operating cashflows of over RM2.5 billion a year for next 2-3 years. So I would expect YTLP to have no issue of funding the equity portion of the capex requirements for the WTE and green data centre park jobs.

I am not too sure of any benefit of issuing redeemable bonds at the moment but I do see the advantage of giving out free warrants which will serve several purposes:
1) to raise funds over next 5 years, eg. issuance of 400 million warrants (1 warrant for every 20 ordinary shares) at exercise price of RM2.00 per share may raise equity money of RM800 million
2) to reward existing YTLP shareholders by giving out free warrants which will be worth RM1.00 per warrant when mother share reaches RM3.00

@Abcdefg123456789, it is hard to predict how YTLP share price will move for short term, in fact it is impossible to predict short term share price movements for any stock.

As stated before and agreed with Mr. OTB's forecast, I think YTLP should be able to touch RM4.00 in 2024 based on 10x PER.

definitely no more cheap power as Brent crude oil price shot past USD90 per bbl.

It will be good for PowerSeraya profit margin as it has secured relatively cheap gas for next 2 years and also good for Jordan power arbitration case.

Bonia just won an arbitration case against an individual for their JV in Vietnam. Bonia will be getting RM21.47 million of compensation from this case.

Coupled with the proceeds of RM17 million from disposal of 30% stake in Sembonia, Bonia will have total RM38 million of extra cash proceeds in FY2024, which pave the way for a bumpy special dividend of at least 10 sen.

I see this as a healthy correction after a good rally from RM1.38 on 1st August to a high of RM2.19 yesterday.

Any sustainable rally needs time for consolidation before the next uptrend. YTLP may consolidate for 1-2 months before the next quarterly result which may be the next catalyst for a new uptrend, or may break up RM2.19 by 18th September when it is included in FTSE Asia Pacific index and foreign funds buy in.

It may also dip to RM1.80 if coupled with a "bad" news when certain fractions want to press the share price down to buy lower. Remember the incident on 20th June when the news of EMA introducing TPC broke out, YTLP share price dipped from RM1.30 to RM1.15 intraday but quickly rebounded leaving a tail in the chart. I had suggested that as a good buying opportunity but not many had listened. I was glad to have added a lot at below RM1.20 then.

In any event, I see RM1.88 as a strong support, which incidentally was the level foreign funds pushed up to on 21st August when the news of YTLP inclusion into FTSE Asia Pacific index came out.

@batmanisbest, please see calculations below which I did in last May on YTL Power's net cash position. There has not been much difference in YTLP balance sheet since then except for the increase in gross cash holdings after the disposal of Electranet.

Cash holdings and Debts

YTL Power disposed off its 35% stakes in Electranet Australia for RM3.05 billion in Feb 2022. This effectively turns YTL Power into a nett cash company at the holding level.

Investors may be deterred by purely looking at the massive debts at YTL Power’s balance sheet. These debts are high as YTL Power consolidates debts of various subsidiaries which are mostly ring fenced at the subsidiary level. For instance, Jordan Attarat Power may have total borrowings of USD1,500 million and YTLPI may have consolidated RM2.7 billion of debts in its balance sheet. But this debt is fully ring fenced at the project company level Attarat Power, meaning that any default at Attarat Power will not cause any cross default nor have any repercussion to YTL Power level. These debts will be serviced solely by Attarat Power with its own operating cash flows and YTL Power will not need to pump in any money to help servicing the borrowings there.

As of 31 Dec 2021, YTL Power has total debts of RM30.8 billion on its balance sheet and gross cash holdings of RM10.3 billion, hence nett debt of RM20.5 billion. An estimated RM12.8 billion of nett debts sit in Wessex Waters company level, RM6.0 billion in PowerSeraya, RM2.7 billion in Attarat Power. PowerSeraya may have cash of SGD200 million and Attarat Power USD300m. Hence, after we remove nett debts ring fenced at subsidiary level, YTLPI actually may have nett debts of RM20.5b – 12.8 – (6.0 – 0.6) – (2.7 – 1.2) = RM0.8 billion. This is lower than the estimated nett debt of RM1.1 billion by Maybank analyst and RM7.4 billion by CIMB analyst.

After the disposal of Electranet for RM3.05 billion, YTL Power will turn to a nett cash position at holding level with estimated nett cash of RM2.2 billion or 27 sen per share.


dragon328

1,337 posts

Posted by dragon328 > 5 days ago | Report Abuse

and some further differences in debt amounts due to exchange rate fluctuations:

Wessex debt of 2.3b pounds has become RM13.8 billion at 1 pound = RM6.00 now compared to RM5.50 last year
Jordan debt of US$1.5b has become RM3.0 billion at USD1.00 = RM4.55 now compared to RM4.10 last year
PowerSeraya debt of SGD2.0 billion has become RM6.8 billion at SGD1.00 = RM3.40 now compared to RM3.05 last year

So total debts at these 3 assets level have gone up by RM2.1 billion in ringgit terms, but YTLP has since seen few hundred million of ringgit of operating cashflows (say RM700m) since Dec 2021, so its net cash position has become

RM2.2bn (last May) - RM2.1bn + RM700m = RM800 million very roughly

YTL Power has since secured another data centre deal with China GDS for about 200MW solar-powered data centre at its Kulai site, but so far I have not heard any news of construction being started yet.

I have the impression that the management is working hard to secure new data centre deals for the balance 250MW capacity at its Kulai site and it is in good progress, given the fact that the company is looking for extra land to expand the green data centre park business by participating in the bidding for BPlant stakes.

Dear OTB,

There has not been much details on YTLP's green data centre business since the company launched the 500MW data centre park at Kulai last year. Recently at the 4QFY2023 result briefing, YTLP management guided for a Pretax profit of RM100 million for the 1st phase 48MW green data centre once completed in stages over 4 years.

That's higher than my own estimation which projects for PBT of about RM50 million a year for the 1st phase 48MW data centre, as I assume a low teen project IRR, 80% debt funding, 10-year loan tenor at close to 5% interest rate.

Why completion in stages over 4 years for the 1st phase? This is because out of the 48MW in the 1st phase, 32MW has been committed by SEA Group and the balance 16MW may have not yet been committed by any party. For the 1st phase 32MW, the installation of solar power is expected to complete in 1Q 2024 and YTLP will be able to start recognising some profits in its Q3 FY2024 result.

So far, I don't think any analyst has factored in any profit contribution from the data centre business.

@kcwong98, I refer to the various analysts' reports on TM, Maxis and CelcomDigi to get a sense of how many subscribers they each has.

@cgtan2020, I am not sure of exactly how much market cap is qualified for mid cap in FTSE Asia Pacific index. As YTLP has been included in the Small Cap in the latest review, it should have been done in early July or before when YTLP's market cap was below USD2.0 billion.

In the next review, it should be included in the Mid Cap then.

@KLV868, welcome on board! Let's make good money together!

As before, Think Big, Dream Wild

@cgtan2020, you are probably right. Come 18th September 2023, YTL Power will be officially included in FTSE Asia Pacific index and many funds which follow this index will buy YTL Power and Hap Seng as exposure to Malaysia equity stocks. But as you have already noticed, nowadays some funds do make pre-emptive moves by buying early, so I think YTL Power will continue seeing buying interests in next 2 weeks leading to 18 September.

Though YTL Power share price has jumped up substantially but its market cap in USD terms is still relatively small at RM2.13 x 8.1bn = RM17 billion or USD 3.8 billion only, so it only qualifies for the small cap in FTSE Asia Pacific index. Sembcorp has a market cap of SGD9.56 bn (valued at 11x PER on Net profit of SGD870 million) or USD7.3 billion so it qualifies as a Mid Cap company in FTSE Asia Pacific index, which hence attracts larger fund allocation.

PowerSeraya is making net profit of about SGD720 million, 20% lower than that of Sembcorp. By using the same valuation, PowerSeraya should be worth SGD 720mn x 11 = SGD8.0 billion. YTL Power's 100% stake in PowerSeraya is hence worth RM27 billion or RM3.36 per share.

At current YTLP share price of RM2.13, you are getting all other assets (Wessex, Indonesia Paiton, Jordan Power, green data centres, digital bank, Yes 5G business etc) for free.

Mild profit taking today has been well adsorbed. Looking forward to new highs for YTL Power next week.

It has been a meaningful week. Have a good weekend guys!

YTL good closing today!

Look forward to continued re-rating next week

catching up! Good move today

Ya I don't expect YTLPower to under-estimate any competitor, and on the other hand I also do not expect YTLPower to be overly aggressive in bidding for the RE import to Singapore if the terms and rewards are not attractive.

As mentioned yesterday, there will be huge opportunities in Malaysia itself for new solar power installations, which may be as lucrative as RE export to Singapore. Do not be overly opitimistic on RE export to Singapore, though YTLP does stand advantageous given its local presence in Singapore retails electricity market.

In any case, the market has not yet priced in anything of RE export to Singapore nor any new solar power projects in Malaysia for YTLPower in its share price which trades at prospective PER of just 5x and dividend yield of 7%.

As I stated before, RE import to Singapore is no easy task. To Singapore, security of supply will be of paramount importance. To bring in RE via undersea power cables from Australia or Indonesia will involve huge costs and invite great concerns on power security. Just imagine if the undersea power cable from Indonesia were to be cut off abruptly for whatever reason, Singapore would experience a sudden drop in power supply and it might cause a national blackout. No country would tolerate such a scenario, hence the EMA will demand extra safety precaution measures, extra redundancies in power design, extra battery storage capacity for such a single large solar power supply (2,000MWp), certainty of financial supports to fund the project to completion, huge penalty clauses on any project default etc. All these will add costs to the project and risks to project developer, besides taking the demand risks (price and volume) & supply risks (weather conditions, sea conditions etc).

There will surely be competition for RE import into Singapore, I can guarantee you.

Recall that there was an even more ambitious project to bring in 4,000MW of solar power all the way from Australia via undersea power cables, but that project was already dead before the tender starts.

Last minute a big fund buying up 3 million shares of YTLPower, trying to push it to close at 2.18 but some retailer chicks took profit and pushed it to close at 2.14.

Anyway, the profit taking on YTLPower seems to be over after almost 30m shares came out today on T+3 from last Friday huge 73m volume. Hold tight.

You are probably right pang72.

I was puzzled with the huge volume of YTL today but after seeing your comment, I think it was likely a married deal between two foreign funds.

Posted by pang72 > 35 minutes ago | Report Abuse

4.45pm 74mils transaction
5.50pm 149mils transaction..

Last 5mins around 70mils makan syiok Syiok...
GREAT MOMENT

You can check back a The Star news last year where the paper interviewed YTLP executive director Dato' Yeoh after the disposal of Electranet. Dato' Yeoh confirmed that the company would be in net cash position at the holding company level after the completion of Electranet disposal.

and some further differences in debt amounts due to exchange rate fluctuations:

Wessex debt of 2.3b pounds has become RM13.8 billion at 1 pound = RM6.00 now compared to RM5.50 last year
Jordan debt of US$1.5b has become RM3.0 billion at USD1.00 = RM4.55 now compared to RM4.10 last year
PowerSeraya debt of SGD2.0 billion has become RM6.8 billion at SGD1.00 = RM3.40 now compared to RM3.05 last year

So total debts at these 3 assets level have gone up by RM2.1 billion in ringgit terms, but YTLP has since seen few hundred million of ringgit of operating cashflows (say RM700m) since Dec 2021, so its net cash position has become

RM2.2bn (last May) - RM2.1bn + RM700m = RM800 million very roughly

@cgtan2020, please see calculations below which I did in last May on YTL Power's net cash position. There has not been much difference in YTLP balance sheet since then except for the increase in gross cash holdings after the disposal of Electranet.

Cash holdings and Debts

YTL Power disposed off its 35% stakes in Electranet Australia for RM3.05 billion in Feb 2022. This effectively turns YTL Power into a nett cash company at the holding level.

Investors may be deterred by purely looking at the massive debts at YTL Power’s balance sheet. These debts are high as YTL Power consolidates debts of various subsidiaries which are mostly ring fenced at the subsidiary level. For instance, Jordan Attarat Power may have total borrowings of USD1,500 million and YTLPI may have consolidated RM2.7 billion of debts in its balance sheet. But this debt is fully ring fenced at the project company level Attarat Power, meaning that any default at Attarat Power will not cause any cross default nor have any repercussion to YTL Power level. These debts will be serviced solely by Attarat Power with its own operating cash flows and YTL Power will not need to pump in any money to help servicing the borrowings there.

As of 31 Dec 2021, YTL Power has total debts of RM30.8 billion on its balance sheet and gross cash holdings of RM10.3 billion, hence nett debt of RM20.5 billion. An estimated RM12.8 billion of nett debts sit in Wessex Waters company level, RM6.0 billion in PowerSeraya, RM2.7 billion in Attarat Power. PowerSeraya may have cash of SGD200 million and Attarat Power USD300m. Hence, after we remove nett debts ring fenced at subsidiary level, YTLPI actually may have nett debts of RM20.5b – 12.8 – (6.0 – 0.6) – (2.7 – 1.2) = RM0.8 billion. This is lower than the estimated nett debt of RM1.1 billion by Maybank analyst and RM7.4 billion by CIMB analyst.

After the disposal of Electranet for RM3.05 billion, YTL Power will turn to a nett cash position at holding level with estimated nett cash of RM2.2 billion or 27 sen per share.