A major re-rating is on the card

many thanks for @Neoh Jia An, @dollardollarbill and KingKKK for the good articles and information on PBA

@Mr OTB, your Insas and Insas-WC are also flying high in past 2-3 days. Hope you are making big money on these.

@KingKKK, congras on your PBA. It is flying high. I missed it

Btw, anyone here can share any other investment ideas?

As what chessgame99 suggested, one should not be too obsessed with any one particular stock no matter how bright the prospect is.

As YTL Power share price rises high with big volume, I see a little worrying trend as more and more retailers jump in and out as the stock is hot. This inevitably creates higher volatility in YTLP share prices, as we saw it swinging from a low of 3.61 to a high of 3.87 yesterday.

I will always advocate for long term investment holds, especially those who have recently bought in at higher prices. They must have a longer term view rather than doing short term trading, as we cannot simply time it right.

Though I still see significant upsides ahead for YTL Power, but no doubt the risk of entry now has become much higher, when compared to last year when share price was below RM2.00. So, you need to assess your own risk to match your investment horizon.

Net short position will inevitably increase as share price rises further, but I expect these shorts will be closed pretty fast.

Singapore USEP came down in Dec inline with softening crude oil prices that dipped below USD80/bbl. But again the fluctuations of USEP have little impact on PowerSeraya earnings.

@jeffchan1901, I started buying YTLP around RM0.70 and added more after seeing the strong quarterly results from PowerSeraya in May 2023 around RM1.00-1.20. Then along the way, I added a little bit more on share price dips, for example in June 2023 when Singapore EMA announced the implementation of TPC and YTLP share price dropped over 10% to RM1.15. That time, I remember I did call for ADD but am not sure if anyone followed.

Another good time to add was when it corrected to a low of RM1.88 from the peak of RM2.24. That time not only myself was adding, I think there were a couple of other gentlemen here also called for an add.

The most recent time good for add was when the share price corrected towards RM2.31 from a high of over RM2.50 after the deal with Nvidia was announced in late Dec. There were a lot of profit taking after the news, but I felt that the share price gain of few % did not reflect the huge potential of the AI data centre deal, so I added more. But each time I added smaller quantity as the share price became higher.

For the last time I added around RM3.35, I just bought back the small quantity that I sold at RM3.50.

The main reason I added along the way is because I think the share price is still undervalued at current prices, and there is still ample upside if I hold long enough. The key is also that I feel the downside is limited in foreseeable future for YTLP and it is not easy to find another blue chip liquid stock that has similar upside or higher dividend yield than YTLP at my average buy-in price.

@wkc5657, thanks for the complements. If you missed out on the early rally of YTL Power & YTL, it is always not too late to buy on dips or any meaningful correction. But do not chase high.

As Peter Lynch wrote about Warrent Buffet: " He doesn't care what the general stock market has done recently or will do in the future. He purchased over US$ 1 billion of Coca-cola in 1988 and 1989 after the stock had risen over fivefold the prior 6 years and over 500 folds the previous 60 years. He made four times his money in three years and plans to make a lot more the next 5, 10 and 20 years with Coke."

This statistic proves my earlier statement that weak holders from retailers have sold cheap tickets into the hands of foreign funds. As this round of foreign buying is very strong, they must know something we don't, and we have no way to time the purchase or sale of our tickets, so the better way is just to hold on until YTLP share price significantly exceeds the fair value.


According to statistics by Dibots, YTL Power was the most net bought stock by foreign investors in the first trading week of the year with recorded net buying of RM110.2mil.

Conversely, YTL Power was among the most net sold stock among local institutional (RM22.7mil), retailers (RM41.2mil), nominees (RM41.9mil) and proprietary (RM4.4mil) investors for the same week.

@myloh123, SimplyWl street has since revised up tp for YTLP to 4.93.

Pls check link posted by cgtan2020 earlier

@KLV868, without any detail about HSR, I am not able to make any projection as to whether HSR will be profitable or not.

But one thing I am confident of is that if YTL did get a portion of the HSR jobs again (like last time the southern portion was awarded to YTL), it would be profitable to YTL, at least for the construction work and supply of cement and building materials.

From its records, YTL group never undertakes any work that is not profitable. For instance, the first power station construction work completed by YTL in world record time of 15.5 months (compared to Siemens' typical 36 months), the JB-Gemas double-track railway work, the ERL work which has turned profitable years ago, and now Yes 5G is on the brink of breakeven.

HSR is a long game, it may take many years to build up the ridership to make the project profitable, but as the project is good for the economic development of the country and good for the people in connectivity, it will definitely be profitable eventually. Without knowing the funding structure, no one can tell when it will turn profitable.

Fantastic closing 3.68!

Congras to those who still hold on. You can go and spend some money at YTL hotels or restaurants or shopping malls to help pushing up earnings for YTL group. Have a good weekend.

@cgtan2020, congras to all. I am waiting for another 2 bags to come in next couple of months hopefully.

cgtan2020 was tight, net short position on YTLP has come down to zero

https://www.bursamalaysia.com/misc/missftp/sblnt/NetShortPosition20240111.pdf?t=1705040038

Intermittent profit taking along the way of a long rally is normal, weak holders just sell into big funds' money and those who can hold longer.

@ChloeTai, I did buy the first batch of Genting shares around RM4.60 all the way to RM5.00 early last year only to see it drop to a low of RM4.00. But I have added more from RM4.08 to RM4.30 to bring my averaged price to around RM4.50. Now I am in the money!

@cgtan2020, yes you were right. They just blocked any mention of other financial website link

Foreign funds may have more and faster info than us retailers, eg. some of them might have known that SimmplyWlSt was going to upgrade YTLP but we retailers only got to see it today

I have tried to post some comments at least 5 times but it just failed to get posted

ya frustrating

For example, I bought in Padini when it was lingering at RM1.20-1.30 at one time, then suddenly the share price jumped to above RM2.00, and after a short consolidation around RM2.00 then it rallied up non-stop to a high of RM4.60, then a short pause before it rallied further to RM6.00

@cgtan2020, I cannot remember which year, but rather individual stocks that foreign funds used to chase high previously.

I will just stop here until i3 fixes the problem

for some reason, I am not able to post long comments

@HumptyDumpty, you are right that YTLP share price rally in the new year really took me by surprise. But if we fall back a step and look at previous rounds of foreign funds buying in Bursa, the share price rally in YTLP has been well within expectation.

I did not manage to post any comment, will try again

...no need to get too excited ..

haha I will stick to my ID as 328 for now. Just let the share price run until it significantly exceeds the fair value. Each level of resistance is just a number for technical chartists, most of them got beaten time and again as fundamentals over ruled. So need to get too excited, but also don't chase high.

Happy new year!

The Niseko land bank is under YTL Corp. Only Hilton Niseko Village has been injected from YTL Corp into YTL REIT so far, the other 5 hotels/resorts are still under YTL Corp to be injected into YTL REIT when each asset matures.

First it was YTL who ran up first from RM1.50 to RM1.95 then YTL Power followed to run up from RM2.50 to RM3.00, today it was YTL turn again to push ahead higher in % terms.

Congras to all who still hold on. Have a good weekend.

So good to see that Genting still managed to close higher than previous high of 4.71, despite the price of Genting Singapore lingering around SGD1.00.

Is some good news coming or foreign funds coming in?

Good closing today!

Congras to all who still hold on. Have a good weekend.

Anyway the market has not priced in any earnings contribution from Brabazon project in YTLP earnings projection, nor given any value to this massive property project in sum-of-parts valuation of YTLP.

As for that matter, the market is still giving zero value to all other assets of YTL Power, i.e. Wessex Waters, Jordan Power, Jawa Power, data centres, digital bank, WTE project etc. Analysts are still hopping on the issue of earnings sustainability of PowerSeraya only.

But foreign funds are moving ahead of them in the new year.

@harvest6138, that is good news. With the first batch of new houses under this second phase to be completed in late 2024, we can expect more meaningful earnings contribution from this Brabazon project to YTL Power starting from Q2 FY2025.

@hoplanner, that's the issue with some of these local analysts. They do not know how to react now after their earlier earnings projection was made too low due to whatever reasons only known to themselves.

I saw the report and was hoping that this analyst would use the WTE project or AI data centre to raise the tp for YTL Power but unfortunately he did not make any adjustment to the target price. Guess his hands were tied.

Actaully if local analysts are unsure of how to project earnings for PowerSeraya, they can check with their counterparts in Singapore who cover Keppel or Sembcorp to get a sense of how they think the earnings of power companies in Singapore will look like in next 2 years, rather than acting like an expert that they should not be.

These local analysts are more familiar with the monopolistic electricity market in Malaysia, and that's why they are comfortable with bullish earnings projection for Tenaga, and seemingly optimistic of the recovery of the huge receivables sitting in Tenaga balance sheet.

@factfinder93, I am not worried at all with any risk of defaults for the shareholders' loans given to Jordan Power by YTLP.

The reason is simple. Due to the ongoing conflict between Israel and Hamas and potential escalation into regional areas, the gas supply from Israel to Jordan is getting disrupted. Hence most of the gas fired power plants in Jordan are not able to run but the country cannot do without electricity supply. What is being observed on the ground is that the YTLP's oil shale-fired power plant in Jordan is being dispatched to the max as Nepco desperately needs the electricity supply as there is not much alternative.

Though it was reported earlier that Nepco had been paying only half of the PPA payments to Jordan Power, but I think situation is going to change pretty soon. As you simply cannot hope for Jordan power to run to the max but just pay them half the money, right??

Shareholders' loans are ranked behind or pari-passu with senior debts, so far we have not seen any sign of default for any senior debt.

@hoplanner, when I wrote about Sembcorp at 11x PER, I was using the past earnings as indicated in google or Yahoo Finance, each indicated a PER of 10.8x and 10.6x respectively.

But it does not matter when each used the past FY or past 4 quarters rolling earnings. The more important is future earnings, not past. There must be some basis for DBS analyst to give a PER of 14x on FY2024 earnings to Sembcorp, probably based on the understanding that the strong earnings seen in past few quarters would continue to be stable.

PowerSeraya made a net profit of SGD246 million in Q1 FY2024, going forward if I take a more conservative view and assume a steady net profit of SGD200 million every quarter, PowerSeraya should be able to make net profit of SGD 800 million a year for FY2024 & FY2025 at least.

Using a fair PER of 10x, PowerSeraya should be worth SGD 8.00 billion minimum. If using DBS valuation of 14x PER, PowerSeraya would be worth SGD11.2 billion. even at the conservative valuation of SGD8.0 billion, PowerSeraya is worth RM28 billion to YTL Power as it is a 100%-owned subsidiary. What is the market cap of YTL Power now? At RM3.16, it is RM25.8 billion, 8% lower than the valuation of PowerSeraya alone.

That's why I said above foreign funds are getting all the other assets (Wessex, Jordan Power, Jawa Power, data centres, WTE project, digital bank, potential RE export to Singapore etc) for free!

The share price movement is not dictated by a few words that you said or I say, the volume of YTL Power shares traded over these few days are so high that it can only be foreign funds aggressively buying.

Foreign funds can access to more up-to-date information and more professional reports by Singapore analysts on the Singapore electricity market from research reports on listed companies there like Keppel and Sembcorp.

It is no mistake that both Keppel and Sembcorp are trading near 5 year high, at PER of 11x to 12x based on past year earnings. Investors in Keppel and Sembcorp must be happy with the earnings projection given by the respective management when they pay 11x or 12x PER for the stocks. Foreign funds must be finding YTL Power as a cheaper alternative to power plays in Singapore, as currently PowerSeraya contributes over 80% of earnings of YTLP. Even based on sole contribution from PowerSeraya alone, YTLP is trading a forward PER of less than 8.0x compared to 11x for Sembcorp. And they are getting all other assets (Wessex, Jordan, Jawa Power, data centres, WTE project, digital bank etc) of YTL Power for free.

You are right that stock market is forward looking. How far ahead would you look ahead? 12 months? 2 years? If PowerSeraya/YTLP management tells you that the strong earnings will continue into 2026, meaning FY2024 and FY2025 and possibly FY2026 earnings will be as strong from Singapore. How far ahead more will you want to look ahead?

Just because you have taken profit or have completely missed out on this rally, you can start talking bad on the company. But it will not do any good to yourself or investment income.

@Ytl2023, you can be skeptical of PowerSeraya earnings going forward, just as are so many local analysts. But you are not expert in Singapore electricity market, so are not these local analysts who play down on PowerSeraya earnings. They have been shouting to see "normalisation" of PowerSeraya earnings for months, and each time they got slapped.

Nobody understands the Singapore electricity market than PowerSeraya (or Sembcorp/Keppel) management, not you, not these local analysts, not me.

If PowerSeraya management had guided for strong earnings to continue into 2026, I have little doubt over what they guided for.

It is some of the local analysts who jumped the gun to forecast for a sooner "normalisation" of earnings. And what would be the "normalised" earnings? They wouldn't know also.

@Ytl2023, it is not quite right to compare YTLP's Singapore earnings contribution to those of furniture companies. There was a time when our Malaysia furniture companies enjoyed good profits by exporting furnitures to the US as the property market demand there was very strong. Coupled with strong US dollars, the profits earned by our furniture companies in ringgit terms became larger. Pls take note the key difference here, they made good profits mainly because of the strong demand in the US that gave them a good profit margin, a strong US dollar only multiplied the profit effect. If the underlying profit margin is low, then even a strong US dollar cannot help. You can see now that US dollars now are even higher than those times when furniture companies made good profits. Why are they not making as much profit now when US dollars are at the highest close to RM4.70-4.80??

In the case of YTL Power, the strong contribution from Singapore PowerSeraya is no doubt amplified by the strong Singapore dollars, but the important thing to note is that PowerSeraya's underlying core profits are good at SGD200+ million every quarter. Whether the exchange rate is 3.50 or 3.35 last year when I first recommended, the difference is not big when you multiply the strong core profit of SGD200+ million.

@Pinky, I don't set any particular target price for Wellcall, but just hold on for its growing dividend payouts as the business grows.

If the strong earnings momentum continues into 2024, Wellcall will have free cashflows of 12.7 sen or higher for 2024. Based on 7% cashflow yield, Wellcall should be worth RM1.81 in 2024.

Mr. OTB, that's just joke, it's okay. I don't drive a BMW and do not have any intention to upgrade my car anytime soon.

The important thing is everybody can earn some decent profit from this stock by holding onto it this far. I will continue holding on for dividends which will be better than any other passive income from fixed deposits or EPF.

On new call warrant issuance, you are probably right that investment banks are restricted by the high capital cost of holding the mother shares for hedging.

For instance, C33 has a issued quantity of 150 million shares which are a big one. For a conversion ratio of 1.5x, the issuer bank should need to hold 150m/1.5 = 100 million shares of YTL Power mother shares in order to hedge 100% of its call warrants issued. To buy 100 million shares of YTL Power, the issuer bank needed to set aside RM200 million of capital if YTLP was at RM2.00 at issuance date.

But if the call warrant was issued at a decent premium of 15% to 20%, then the issuer bank would have earned some 12sen to 15 sen x 150m = RM18 to 22 million of gains upon issuance. That would be about 10% gain over the required capital layout of RM200 million in just 6 to 8 months.

And upon expiry of this C33 call warrant on 28 Feb 2024, the issuer bank can then issue a new batch of new call warrants on YTLP by holding onto the 100 million shares it used to hedge against C33.

They can just keep doing that every 6 to 8 months by using the same capital outlay on the same stock, as long as the underlying stock continues to perform well and the market expects the stock to continue going up so they will buy the new call warrants for higher leverage.

@HumptyDumpty, for the record, you cannot exercise any call warrant, it is not the same as other traditional warrants with a stock code of -WA, WB etc.

Most or All of the call warrants on Bursa are cash settled upon expiry by the issuing bank at the settlement price which is calculated as follows:

(the last 5-day average price of mother share before expiry - conversion price)/conversion ratio

Take the example of YTLPower-C33, the conversion price is RM1.65 and conversion ratio is 1.5x, so for an average final price of say RM2.99 upon expiry, the theoretical settlement price would be (2.99 - 1.65)/1.5 = RM0.893. C33 is trading at RM0.885-0.890 which is at a slight discount to the fair value.

FYI, as of 30 Sept 2023, YTL Power had gross cash of RM8.2 billion in its balance sheets, ready to for deployment to fund any future new projects.

And its operating cashflows are very strong, which will help to fund new projects. For the Q1 FY2024, YTLP registered operating cashflows (before working capital changes and capex) of RM1.7 billion, deduct capex of RM956 million, it had free cashflows of RM745 million for Q1, annualised to RM2.98 billion (after funding estimated capex of RM3.8 billion).

So it should have no issue of giving out dividends of RM1.0 billion to RM1.2 billion for FY2024/2025.

@xiaochen, the investments that you mentioned above will be more of capex nature, i.e. these will be capitalised in the balance sheet when the investments are made, instead of being expensed off in the P&L. So these investments will not affect earnings per share or drag down EPS.

Only after the investment capex is completed, then depreciation charges related to the new investment capex will kick in and reduce profits before tax, then only it will reduce EPS. But if the new investment is earnings accretive, then the new income stream will be more than the depreciation charges and interest expenses related to borrowings made to fund the new investment, hence EPS should rise further.

@xiaochen, what I have in mind for the projected EPS of 40 sen for FY2024 is largely inline with what you projected above, i.e. RM850-900m net profit every quarter for next 2 years to 2026.

One thing I don't quite understand how these local investment banks are thinking when they tried to push down the valuation of YTL Power. Could they earn more money by doing that?

They advised local funds like EPF to dispose off large positions in YTL and YTL Power in 2023 when the share prices were below RM1.00. Could they have earned a lot of commission or advisory fees in doing the selldown?

If they advise some foreign funds or clients to buy shares in YTL Power by getting the company to place out 1% or 2% blocks, wouldn't such deals earn them more advisory fees & commission?

Another thing is that some local investment banks issued call warrants on YTL Power but did not hedge 100% by buying enough mother shares, so they tried to push the mother share down before the expiry of the call warrants so that they didn't have to pay more for cash settlement of the call warrants. I just wonder how much they could save in doing that, and whether they would have made a loss in that issuance of the call warrants.

Why not just issue more new call warrants and hedge 100% with mother shares of YTL Power? Then the investment banks can safely pocket the 15% to 20% premium in call warrant issuance, rather than taking the risk of under hedging and the continued share price appreciation of the mother share upon expiry of the call warrants.

Just imagine, if an investment bank issues 100 million of new call warrants, and a 20% premium in issuance price (eg. 3 sen premium in a typical 15 sen new issuance price), the bank will earn easily RM10-12 million fee upon issuance of the call warrants immediately without risk. Why don't they do that?

If a bank issues 3 batches of call warrants on a stock like YTL Power, it can earn a handsome, risk-free gain of RM30-40 million over a period of 6-9 months.

Of course they will need big capital to hold some mother shares for hedging.