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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

wow powerful surge of YTLPower will hopefully pull up YTL along

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

Save that money and extend the HSR north to Penang better

good call hng33

good call hng33

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

agree with your view

@hng33, how do you see the current rally of YTLP? can break previous high of 0.815?

You seem to be good at timing the market and spotting trend reversal.

It turns out that it was not EPF who sold YTLP down last Friday as there is no bursa announcement. EPF kept selling YTL shares on 28 Feb, 1st Mar and 2nd Mar.

Fund flow statistics posted by CIMB shows that retailers sold a total of RM8.7 million worth of YTL Power last week, it was almost 11 million shares which matched the volume sold down last Friday.

So it appears to me that EPF is trying to switch more from YTL to YTLP as the latter offers higher dividend yields in near term.

EPF bought 1.44 million shares in YTLPower on 1st March when it sold 10 million shares in YTL.

Let's see if EPF sold any shares in YTLP last Friday

good advice tonywong8. Don't play contra. Hold long term

EPF disposed another 10.3 million shares in YTL on 1st March, not sure when it will end.

When it is done, the rally will be stronger as EPF may need to buy back at higher prices

EPF last sold some 10 million shares in YTL on 28 Feb 2023, that is when YTL shares shot up to 0.58 then got pressed down to 0.555. Again similar thing happened at YTLPower last Friday when its share price was sold down in the afternoon from 0.815 to 0.785 with volume of 10.8 million shares. I suspect it was EPF who sold it down.

EPF investment strategy is hard to comprehend, distorted by various withdrawals and dividend payouts at times. But at the end of the day, fundamentals prevail and EPF will start buying back as YTLP and YTL increase dividend payouts going forward

In my earlier article on YTLP in April 2022, I estimated a sum-of-parts value of RM32.2 billion for YTLP in the conservative case. This is not too far off from RAM's estimated figure of RM30 billion of realizable asset value.

The key to note from above is the word "realizable", meaning that YTLP had assets which were ready for monetization to the value of RM30 billion as of June 2022. This obviously did not include the green data centre projects yet as it only took off early this year.

It means that RAM valued the existing assets of YTLP (Wessex, PowerSeraya, Jordan, Jawa Power and YTL Comms) at RM30 billion which was even higher than my estimate in the conservative case.

In RAM report, YTLP had unencumbered cash reserves of RM6.83 billion and debts of RM7.5 billion as of 30 June 2022, translating into a net debt of RM700 million at the holding company level. I estimated the net debt to be RM800 million in my earlier article in April 2022, so not too far off.

As YTLP has received the disposal proceeds from Australia by now, so net cash at holding company level should have been at around RM0.5 - 1.0 billion level after allowing some RM300 million - RM800m of capex spending on the Kulai land and green data centre 1st phase.

The important thing to note is the unencumbered cash holdings of RM6.83 billion. This is sufficient to fund the equity portion of capex for the remaining phases of green data centre (secured jobs 200MW, unsecured 250MW) to ensure multi-year growth.

I estimate that after allowing some RM2.7 billion for the remaining 450MW of green solar data centre projects, YTLP will still have some RM4.0 billion of unencumbered cash holdings which will enable potential M&A work of RM20 billion assuming 80% gearing.

The strong operating cashflows will ensure higher dividend payouts from FY2023, and the unencumbered cash will ensure business expansion / acquisition and multi-year growth.

many ikan bilis is okay as they will chase back once their orders are makan up. As the big fish CIMB is out of the way, or they may need to buy back some YTLP mother shares if they want to issue new call warrants on YTLPower, funds buying will drive up the share price sooner or later. It is just a matter of timing, the key is to hold it patiently.

With a much higher Regulated Asset Base (RAB) now after heavy capex in past 3 years, Wessex shall reap the benefit of higher water tariffs when the approved WACC is multipled with the higher RAB to derive the capital component of the water tariffs.

This shall increase the quarterly pretax profit beyond historical highs of RM170-180m per quarter.

Thanks hng33 for highlighting the water tariff hikes in Wessex.

Wessex contributed quarterly revenue of RM1,048 million and pretax profit of RM59 million (excluding the non-cash interest provision for index-linked bonds). If water tariffs go up by say average 10% across the board, then quarterly revenue for April-June 2023 will go up by RM104 million which will flow through to the bottom line directly assuming costs and expenses remain the same as Dec22 qtr.

Hence, quarterly pretax profit from Wessex will jump to RM163 million which is not far off from its pre-covid level of RM170-180m per quarter.

today highest volume YTD, shot up to 0.58 but some party deliberately presses it down by dumping few million shares

That's correct unless the arbitration process yields any outcome to change the tariff


We are also guided that the 45%-owned oil shale plant in Jordan could potentially commence operations under the original power purchase agreement (PPA). .....RHB research

CIMB call warrant will be settled based on average prices of past 5 days including today, so they may still have motive to depress it today. Tomorrow we shall see less selling.

You will have noticed that CIMB has withheld its research report on YTL Power after its good quarterly results. Guess it will only release it after today.

Annualised this 4Q number will result in EBITDA of over S$1.0 billion a year. With China reopening its borders and Singapore tourism board projecting almost 100% jump in foreign visitors to Singapore, Genting Singapore will easily see a 20%-30% jump in EBITDA for 2023. For now, I stick to my earlier projection for EBITDA of S$1.4 billion for 2023.

Genting Singapore reported a good set of results for 4Q 2022 with revenue of S$542.5 million (+108% y-on-y, +4.4% q-on-q) and EBITDA of S$256 million (+269% y-on-y, +2.7% q-on-q). What is heartening to see is that the non-gaming revenue jumped 24% q-on-q to S$170.6 million. In this quarter, the non-gaming revenue made up 31.5% of total revenue, a big jump from 26.4% in 3Q 2022. This is almost certainly the highest ratio among regional peers. That's why my article above stressed on the non-gaming facilities of RWS, which will enable it to compete well with MBS.

I reckon that the timing is ripe for a US listing in this Q1 or latest Q2 2023, giving the growth momentum seen at RWLS and the prospect of a full casino license for Empire Resorts at New York city. The risk of getting a good valuation for its US assets will be higher beyond Q1 as US Fed continue hiking interest rates, as it may mostly impact the valuation of its Miami land and cashflow valuation of RWLV.

It is actually imperative for Genting to seek a US listing so that it can monetise its investment in RWLV and reduce its debts. In its latest report on Genting Bhd, CIMB valued RWLS at zero equity value, as it valued it at close to book value of US$4.3b minus debt of also US$4.3b. After Genting injects RWLV into a US listing say for US$4.8 billion, RWLV would be able to pare down all debts and have net cash of US$0.5 billion, and the equity value would become US$4.8 billion (zero debt). Hence in CIMB's sum-of-parts valuation of Genting, total equity value would go up by US$4.8 billion or RM20.6 billion or RM5.32 per share.

In terms of cashflows, RWLV would be getting over US$200 million of operating cashflows a year and potentially distribute all of it to its shareholders. Hence Genm and Kien Huat who would collectively own 49% stakes in the US listed entity would get almost US$100 million or RM430 million cash dividends from the US listed entity just from RWLV alone.

Fortunebull777, it is true that Genting 4Q 2022 result was dented with an impairment loss of RM304.8 million and another investment loss of RM362.9 million. I am not sure where these impairment loss and investment losses came from, and I hope these will not recur.

It was old news that LKT mentioned about a US listing in July 2021 after RWLV opened its door. He said he wanted to wait for the numbers from RWLV to pick up and confidence to return as he sought for a good timing for a US listing.

Now I think the timing is ripe for a US listing as RWLS just reported record revenue of US$237 million (+42% y-on-y) and EBITDA of US$49 million (+119% y-on-y) for 4Q 2022 quarter, a big jump from 4Q 2021. Hotel occupancy increased to 88% and average hotel room rate increased to US$240+.

This is encouraging as the annualised result of this 4Q 2022 almost reaches my projected EBITDA of US$204 million for 2024 in my article above. With such a momentum, RWLS may be able to achieve EBITDA of US$240 million in 2023. At a valuation of 20x EV/EBITDA or 5% cashflow yield, Genting may be able to get a value of US$4.8 billion for injecting into a new US listing. The IPO proceed would be more than enough to settle all outstanding debt of US$4.3 billion at RWLS, making it debt free and hence EBITDA of US$240m would equate operating cashflows of US$240m as there would be no more debt service interests (currently at c. US$195 million a year).