@kcwong98, I do not think Cypark has a large portfolio of solar power assets. I know it has secured some capacity under LSS2 and LSS3, but each tender limited solar capacity to 50MW per player so CYpark may have a max 100MW which none is completed yet.

Furthermore, the secured tariffs under LSS2 and LSS3 were extremely competitive. And solar panel costs shot up after LSS2 tender award so I doubt the winner could make any positive return, at best low single digit IRR.

I am not sure of other players, but I am confident that YTLP will be able to secure new data centre jobs to fill up the remaining capacity at its Kulai site to house eventually 500MW in next 1-2 years.

First phase of 48MW will be completed in Q1 2024, then 200MW more by 2025.

@goody99, I also did not know until YTLP announced that they secured financing of RM1.1 billion for the first phase of 48MW green data centre job, then only I realised the huge capex requirement and the subsequent concession earnings it will earn for next 15-20 years.

Initially when the company announced the total capex for the entire green data centre project at Kulai site to be RM15 billion, I was a little sceptical of the amount. But when they secured the financing, it means financial close and the lending banks have done the necessary due diligence on the project and been satisfied with the project return and debt service cover, and confident with project execution by the company. I should have no doubt about this project as the banks are willing to take 80% risk and I have full confidence in the power team on project delivery.

As share price has moved up some 35% in past few weeks, we should be more cautious in near term trading and more conservative in terms of projections. It is wise to get prepared for any unexpected shock or negative surprise in upcoming quarterly results.

I would advocate for a longer time horizon of investment, preferably 18-24 months, for YTLP in order for the company to realise its earnings potential. Then we shouldn't be worried too much over short term share price volatility.

The fact that Maybank did not include data centre business into YTLP valuation shows that analysts are generally not familiar with this new business and are not sure how to value it.

I believe as more information is available from the company, analysts will gradually upgrade the valuation of YTLP in next few months.

Maybank projections have not included any contribution from data centre division, which it said would add 5.0 sen to YTLP sum-of-parts valuation for the 1st phase of 48MW data centre job.

This coincides with my own valuation for a project IRR of 12%, debt service cover ratio of 1.15x, equity NPV for this 1st phase will amount to 5.6 sen per share to YTLPower.

When fully developed, this Kulai site will house 500MW of green data centres and will add a total valuation of close to 58 sen per share to YTLP.

Maybank's earnings projection for FY2023 for YTLPower has several issues that do not seem to make sense:
1) It lowered total FY2023 earnings from earlier RM714 million to now RM694 million with no explanation
2) YTLP half year 1H FY2023 net profit totalled RM394 million, Maybank expected YTLP to only register net profit of RM300 million for 2H, which does not make sense as YTLP made net profit of RM264 million in Q2 alone. It implied some impairments and write-off which I am not aware of any at the moment
3) PowerSeraya already made pre-tax profit of RM591 million in 1H FY2023, and Maybank itself stated that PowerSeraya could sustain a pretax profit of SG$90 million (RM300m) per quarter, but it projected a total pretax profit of just RM930 million for Power Seraya for FY2023, implying just another RM339 million of pretax profit from PowerSeraya for Q3 and Q4. This does not make sense and Maybank contradicts itself in this projection. Total pre-tax profit from PowerSeraya for FY2023 would annualise to easily RM1,180 million, a hefty RM250 million more than Maybank's projection

4) Wessex already made pretax profit of RM80+million in 1H FY2023, and it will see water tariffs raised by over 10% in Q4, yet Maybank projected a total pretax of just RM124 million for FY2023 for Wessex. Maybank has obviously not factored in the water tariff hikes in its projections

5) Associates contribution (mainly from Jawa Power) in 1H FY2023 already totalled RM162.4 million, yet Maybank projected a total pretax profit of just RM170 million for entire FY2023, implying just another RM7.6 million pretax profit from Jawa Power for Q3 & Q4, which is ridiculous to me. In the absence of any major technical failure, Jawa Power shall contribute a steady pretax profit of ~RM80 million per quarter.

6) The mobile broadbank division made a pretax loss of RM156 million in 1H FY2023, but Maybank projected a total pretax loss of just RM153 million for FY2023, implying a turnaround of RM3 million profir for this division in 2H FY2023, which seems too optimistic to me

7) Maybank projected a total pretax loss of RM378 million for Others in FY2023, compared to RM104 million loss in 1H FY2023. I am not sure on what ground Maybank projected another RM274 million of losses for Others in 2H

@kcwong98, I am not sure how this arena will be financed. As this arena will not be a commercial asset, so I expect financing to be less than the typical financing rate of 65%-80% in the UK. Assuming 50% financing, equity requirement will be about RM275 million over 3 years.

This will be a facility for the community in Bath, and YTLP is expected to earn back the return from selling other residential and commercial properties in the area over time.

Based on past records, YTLP has been generous in paying out dividends:

EPS (sen) Dividend (sen)
FY2007 23.0 15.1
FY2008 20.0 15.2
FY2009 18.4 17.5
FY2010 16.7 17.5
FY2011 19.0 10.0
FY2012 16.0 9.0
FY2013 11.0 0.9
FY2014 16.0 10.0
FY2015 13.0 10.0
FY2016 13.0 10.0
FY2017 8.3 5.0
FY2018 7.7 5.0
FY2019 6.7 5.0
FY2020 2.2 4.3
FY2021 3.9 4.5
FY2022 3.8 4.5

As can be seen above, except for FY2013, YTLP has been giving dividend payout ratio of above 50%, and over 100% in FY2020-2022.

With expected EPS of over 10 sen for FY2023, I have reasons to believe that dividends for this FY will be 5.0-7.0 sen.
With expected EPS rising to 15-20 sen in next 2-3 years, I expect dividend to rise to 10 sen again possibly from FY2024.

YTLPower is already at net cash position at the holding level, with most of the debts sitting at various subsidiaries like Wessex Waters, Jordan Power and PowerSeraya. Each subsidiary will have its own capex program and will raise funds at each subsi level, and I do not foresee much equity money required from YTLPower in next few years for Wessex, PowerSeraya nor Jordan.

The projects that require equity money from YTLP are the green data centre projects and digital bank venture.

Green data centre park has a capacity of 500MW at the Kulai site with the first phase of 48MW under construction and fully funded by 80% debt(~RM1.1 billion) and 20% equity money (~RM200 million). YTLP has secured green data centre jobs of some 250MW, so equity requirements will be about RM1.0 billion, which YTLP will have no issue with as it received some RM2.0 billion cash from disposal of Electranet last year.

As for digital bank business, it is a joint venture with SEA Group of Singapore. I am not sure how much capital this joint venture will need, but I expect most of the funding will come from the capital market rather than equity money as it is a lending business.

@Gun8811, the JB-Gemas double-track railway project was just a construction contract to YTL, so there is no revenue risk. YTL has already earned construction profits though at very thin margin.

KL-Singapore HSR project will be on a different business model where the undertaker will need to fund the project then earn back returns through years of concession. It is still a question as to the project is feasible.

@ocbc, I think YTL would likely partner with LTAT again since they were in a consortium which got awarded the southern portion of the KL-Singapore HSR.

This round, the key is to get financing from China to undertake the entire turnkey project as Malaysia government has no money to fund it and local companies would not take much equity risk. The good thing is that both Malaysia and Singapore have shown interests to push through this project again.

I would expect some China consortium to undertake the entire project with most of local civil & construction works sub-contracted to local parties like YTL or Gamuda.

If terms are favourable, I would not discount the possibility for YTL to take a small equity stake in the HSR concession company and run the business as it has been doing very well with the ERL.

Genting Singapore share price has in less than 2 weeks reached Maybank's revised tp of S$1.18.

Lets wait for further upgrade from Maybank and other analysts.

Genting Singapore share price has gone up from S$1.00 level to now S$1.18, adding RM3.83 billion of market cap to Genting Bhd's stakes or RM1.00 per share.

Genting Bhd share price should be following the rally to catch up at least 50% of such market cap increase from Genting Singapore, or go up by at least 50 sen to above RM5.00 level.

some HSBC funds have been accumulating IGBB almost on daily basis to a stake of over 7% now, greatly undervalued stock that has attracted funds for long term investment

This figure of RM12.8 million pretax profit may vary from an analyst to another as there were a few exceptional items and various provisions. Important to note from this quarter was the doubling of profit contribution from PowerSeraya from 3Q2021, which more than offset the weakened profits from Wessex. The overall result was weighed down by the bigger than expected losses from the mobile broadband division and some losses at holding level.

@goody99, YTLP made a core pretax profit of RM12.8 million in 3QFY2022, after stripping off exceptional items of RM1.3 billion for disposal gain on Electranet, RM290 million allowances for impairments, RM81 million fair value loss on investments and RM19 million forex loss.

goldenhope, it is possible as the timing is ripe for the injection as borders fully reopened and Southkey Mid Valley enjoys high occupancy rates now

wow myloh123, your entry cost is so low, so good. Mine was around 0.70 holding till now

Worth at least RM6.00

There were some unusual off-market transactions on YTL Power in past one week:
23 Mar - 6 million at 0.89
24 Mar - 24 million at 0.86
29 Mar - 30 million at 0.86

Looks like a fund has accumulated these 60 million shares at a good time

I am looking at 2019 high of RM1.08 as next resistance level

broke up 3.00!!

broke up 0.60!!

Minister Ngar in his interview told Sin Chew that Anwar's trip to China will hopefully bring in investments in KL-Singapore HSR project and also big data centres in Malaysia. YTL Corp will most likely be involved in the KL-Singapore project when it is revived as YTL was appointed as the PDP for the southern portion of the cancelled HSR job, while YTL Power will be able to lure more chinese companies to set up green data centres in its Kulai solar power park. YTLP has already secured green data centre jobs of over 100MW from chinese clients, and will still have capacity to get another 250MW worth of jobs in the Kulai site.

UK mortgage approvals rose more than forecast in February, adding to signs that the housing market is starting to stabilize. Lenders approved 43,500 home loans in Feb compared to 39,600 in January. It was the first increase since August and more than the 41,300 predicted by economists.

This is good news for YTLPower who is sitting on a large prime land in Bath awaiting signals for property development. Further good news is that UK pounds sterling is one of the best performing currencies in past 6 months with 14% gain against the US dollars vs 12.5% gain for the euros.

Anwar will meet with Singapore Premier Lee this morning before going to the Chinese conference, then will meet China Xi tomorrow. Looks like a revived HSR is on the table for discussion, this round I think Singapore will want to participate if they get China support in funding and technical know-how.

If the indicative offers in this expression of interests are genuine, I think Genm should just quickly close the deal at anything above US$1.0 billion.

If it can close it within next few weeks or 3 months, then the timing would be very good. Genm will then have the US$500 million cash necessary to support its bid for a full fledged casino licence in New York, and extra few hundred million dollars potentially for special dividend.

It is not confirmed but there are early signs that it will be revived

I think what hng33 interpreted above is probably right. That might be the reason why YTLP only got back RM1.966 billion of sales proceeds immediately after the sale at RM3 billion.

The shortfall of RM1.0 billion was most likely due to provisions for this capital gain tax and some other transaction costs.

In any event, I see this court decision as a temporary setback to YTLP, and I see scope for further appeal. I bear the same thinking that the investment in Electranet was a long term investment of >20 years and should not be subject to this capital gain tax.

If YTLP appealled further and won the case, then it would be a bonus of getting few hundred millions of ringgit back, if it does not appeal further or lose the case, then it is case closed and will not affect its operations in any way. YTLP will still be in net cash position at holding level and have all sufficient cash to proceed with all projects in hand like the green data centre projects, Jordan power plant, potential power export to Singapore etc.

@MyWay, this is good news for YTL as the HSR project will need cheap and big funding. The involvement of Chinese companies will bring along the necessary funding and expertise in high speed rail equipment, and YTL could provide local expertise on material supplies, construction and civil work, project management etc to make the project a success.

YTL is using similar model in the on-going JB-Gemas double-track rail project with Chinese rail consortium taking up the equipment and signalling parts and YTL taking up the bulk of the civil and construction.

https://www.theedgemarkets.com/article/nod-gemasjb-doubletracking-project-positive-ytl-corp

@xiaochen, was the application for capital gain tax relief related to the disposal of Electranet in Australia?

@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.