If a foreign shareholder is just a passive investor like Morgan Stanley in Media Prima earlier, it did not bring any tangible benefit to the company.

But if the foreign shareholder is a prominent investor or a bigger growing company, then it may add value. The former case is a vote of confidence in YTL and the company prospects, the latter case is better with the new shareholder bringing in strategic corporate deals or construction order book for YTL.

We still do not know who is behind this 4.6% stake held thru Credit Suisse (Hong Kong) account, it should be for a rich client of Credit Suisse.

I think you meant YTLPower, as it was just announced this morning Credit Suisse had a 4.6% stake in YTL, plus another 0.8% held by UBS

@xiaochen, did you mean YTLPower or YTL for Credit Suisse (Hong Kong) as the 8th largest shareholder?

There were total 841 million shares traded in 3 weeks from 17 May 2023 when the share price jumped from RM0.665 to a high of RM0.985, assuming 50% of these were acquired by Credit Suisse/UBS, it means 420m shares were acquired at an average price of RM0.825.
Then the share price consolidated between RM0.90 to RM0.98 until yesterday with 300 million shares traded. Assuming again 50% of these were acquired by USB, then average price for these 150m shares was about RM0.94. So the total 570m shares acquired by UBS should average about (420 x 0.825 + 150 x 0.940)/(420+150) = RM0.855.

For a foreign fund to buy into a substantial stake like this, usually they will look for easily 50% to 100% upside from their average purchase price, so I am looking at RM1.28 as 1st target and RM1.70 as 2nd target for YTL.

The entry of UBS as the new substantial shareholder in YTL speaks loud on this promising growth stock

@super911, there is no quick answer to your question. But I try to give my thinking on this:

YTL has been in the telco business since it got the wimax licence some 10 years ago and no doubt it has been bleeding non-stop. All this while, YTL has been trying hard to gain market share in the competitive telco business but has not been successful as the industry has been dominated by Maxis, Celcom and DIGI which have lucrative voice business segment. What it has tried to do is to control losses by cutting operating costs to the minimum and by doing some government programs to help increasing the topline. If it exits the telco business now, how to exit? Who wants to take over? Take over for how much? It won't fetch much valuation which will certainly not enough to cover the capital investment so far.

It is waiting for a turning point, and I believe the turning point is coming now with the 5G roll-out. By getting access to DNB 5G network, every telco will have the same cost structure at least until the coverage reaches 80% nationwide. Hence YTL Yes will have the same competitive edge against every other telco in the 5G business. When it is rolled out to 80% nationwide, mobile 5G may be able to replace fixed line broadband service in every household as it will be cheaper (eg. RM30 per month for 30GB per 30 days or <RM80 for unlimited 5G data vs RM168 per month for unifi unlimited data) and faster (700 MBps - 1 TBps for 5G vs 300-500 MBps for fixed line broadband). For one, I will switch from unifi to mobile 5G then as I will save half the fee every month.

There are potential 10 million households in Malaysia and over 30 million mobile phone users. If YTL is able to get 10% market share for mobile 5G business, it will have about 3 million mobile 5G users. Assuming RM50 per month of mobile 5G fee on average per user, potential revenue for YTL Yes could reach RM150 million a month or RM450 million revenue per quarter.

Right now, Yes is doing revenue of RM109m a quarter and pretax loss of RM103m a quarter, meaning the operating costs are about RM212 million a quarter. So if Yes can do revenue of RM450 million a quarter, it will have a chance to turn in a pretax profit of RM238 million a quarter.

If it only gets 2 million mobile users, then potential revenue will be RM300 million a quarter and pretax profit will be about RM88 million a quarter.

For only 1 million mobile users, Yes could make revenue of RM150 million revenue a quarter and cut pretax loss to RM62 million from RM103m currently. Added back with non-cash depreciation, operating cashflows may turn positive then even with just 1 million mobile 5G users.

Then only it makes sense for YTL to consider disposing off this telco business and other telcos will consider taking over at a decent valuation.

ya many of the hotels and shopping mall assets are parked under YTL Hosp REIT and Starhill Global REIT, but YTL is the ultimate owner of all these assets and will benefit if these overseas assets earn more from operations or strong currencies.

Besides, there are still many assets parked under YTL Corp directly such as the huge landbank in Sentul and Japan Niseko, and some hotels and resorts which have not been injected into REIT yet.

@hng33, YTL also owns numerous hotels, resorts and shopping malls across Australia, Japan, UK, Europe and Singapore, which will benefit a lot from border re-opening and strengthening currencies in SGD, USD, AUD and Yen.

ChloeTai, I am not aware of any particular bad news for YTL. The current share price weakness is not a big surprise given the poor market sentiment when state elections are around the corner.

Whether or not YTL will bag the MRT3 package at RM10.8bn, nobody knows at the moment. I guess the government has not made a decision yet when focusing on the upcoming state elections. The fact that YTL put in the lowest bid for the above ground package at RM10.8b still gives an advantage to YTL to become the winner, at least the pricing has been made transparent to the public. If the government does not award the package to YTL, it will have to make a good explanation why it does not, either on technical ground or other reasons.

@hng33, yes I did notice that YTL cement division PBT is higher than MCement PBT despite having a 77% stake in MCement. I think YTL may own stakes in other smaller cement plants and some concrete division that have not been injected into MCement

hng33, thanks for the video on Attarat Power. Fantastic achievement and world class facilities.

It is the largest oil-share fired power plant in Middle East and Asia, which burns indigeneous fuel for decades to come.

That makes me believe that Jordan needs this power plant and the ongoing arbitration case will be favourable to YTLP.

30 years of concession of oil-share mining and power generation with option to extend for another 10 years or more. The video says that Jordan has the 7th largest oil share reserve in the world and the reserve may last probably for 100 years. This pave the way for a new project or extension project for YTLP after this first project takes off well.

Both the Kwasa Damansara and UK Brabazon property projects are multi-year long term projects which may bring in construction work worth billions of ringgit to YTL.

Potential upsides will be for YTLPower to secure more green data centre jobs which will add to its existing RM7.0 billion job streams secured so far.

good closing. Share price has more than recovered from the dividend adjustment. 2.5 sen dividend is now free

@apple888, this 2.5 sen dividend is ex tax, it is now single-tiered tax deduction at the company level

see just now someone sold almost 1 million shares of YTLP in a couple of minutes and pressed down the share price to RM1.26. It might have been EPF who still has over 400m shares of YTLP. We may get opportunities like this in next 2 months to accumulate YTLP at lower prices.

@speakup, yes I need to chill out under such hot weather. Will go for a short trip in coming weekend.

Apologies for my harsh words. But I was simply fed up with those people who simply put out offensive remarks or baseless allegations.

Just like the case of Daibochi last year when someone buta buta defended the unreasonable privatisation of Daibochi by Scientex. I predicted very early on that the privatisation attempt would fail simply based on the low offer price and the bright prospects of Daibochi then. It indeed failed miserably. That guy was saying how good Scientex as a company was and how great the boss was, but that was not the point. The point of discussion was the low offer price.

Anyway, I will not respond to these baseless remarks anymore. Waste of time.

If you do not know how to read balance sheet and cashflow statements, or are too lazy to make an effort to study the company prospects , but base your investment decision just based on hear-say or ah beng ah lian critics, pls move to other counter. We don't need such traders over here. We prefer investors who are patient and ready to hold for 2-3 years at least.

If you missed the boat and like to see the share price drop to buy in, you may get the chance in next 2 months. Don't simply sabotage and derate a company by using generic remarks with wrong facts.

@wps123, I don't know where you got the figure of RM36 billion debt from. Based on latest quarterly report as of 31 Mar 2023, YTLPower had total debts of RM30.9 billion and RM8.9 billion of cash, so net debt of RM22.0 billion. Pls get your facts right before you made baseless allegation.

YTLP operating cashflows totalled RM2,171 million for 9 months of FY2023 and topped RM1.0 billion for 3Q FY2023 alone, annualised to RM4.0 billion. Minus off capex of about RM2.0 billion, YTLP will still have RM2.0 billion of free cashflows or 25 sen per share every year. It can support easily 20 sen dividend payouts every year going forward.

The debts mentioned above are mostly sitting at subsidiary level and ring-fenced at each subsi company, i.e. they will not have any repercussion nor cause any cross default to the holding company. FYI, there is some few hundred millions of free cash at the holding company level for future project investments. The debts sitting at the subsidiary levels like Wessex and PowerSeraya are tied to the long term assets, and have their own repayment programs and financial covenants such as for a long term bond with bullet payment at maturity. Debt servicing is never a problem, especially now with strong cashflows from PowerSeraya (that top SGD1.0 billion a year) and impending turnaround in Wessex profits.

You should spend some time studying the balance sheet and cashflow statements, rather than just making baseless claims that made yourself look stxpid.

pang72, I sent you the CIMB reports on YTL and MCement. Pls check your message inbox

In its latest research report on YTL out this morning, CIMB raised tp for YTL to RM1.28 while it upgrades MCement and YTLPower.

One surprise the report mentions about is that YTL put in the lowest price for MRT3 above ground civil work package at under RM11 billion. YTL partnering CRCC also bidded for the turnkey signalling package valued at RM7.0b to RM10b. These jobs will increase demand for cement as well.

CIMB latest research report on MCement out today, tp raised to RM5.08 from RM3.97.

It forecasts free cashflows of around RM680 million for FY2024 and FY2025, supporting maiden dividend payouts from FY2024.

@amateurJR, you seem to be more familiar with this product development. Now it is already 2 years past since the JV started in Jun 2021. When do you expect they will have a breakthrough in new composite products?

If you have more info on this JV and its prospects, please share.

It was a disappointment as initially I thought this JV was promising in making breakthroughs in composite hoses which would enable multi-year growth to Wellcall, but it has so far not made any significant breakthrough.

@Lim Yap, I saw a note in CIMB research report dd 9 Dec 2022 on Wellcall, that said that Wellcall recognised an impairment loss of RM2.9 million Q4FY2022 for its JV with Trelleborg. Wellcall was reported to have invested an initial capital of RM4.5 million in this JV which has been bleeding at RM1.0m to 1.5m every year since Jun 2021. I am not sure whehter Wellcall made any further impairment on this JV after Q4FY2022, but at least it has impaired 64% of its investment.

Wow Ran271221 you have been holding YTLP shares for 20 years, good for you!

Hold it tight for another 2 years and you will be rewarded handsomely.

No, I don't have anyone working inside YTL but do have friends working in the power industry. Anyway, it does not take an expert in the power line to understand the utility business of YTLP, you just need to follow the company development long enough and do some background studies on the industry.

Yes, rising interest rates will tend to lower inflation as a normal tool used by central banks to tame inflation.

In the case of Wessex Waters, high inflation will increase operating costs and erode profits, and rising interest rates will increase borrowing costs and erode profits.

High operating costs will be compensated through higher water tariffs in the operating cost component of the water tariff. Higher interest rates will result in a higher WACC (weighted average cost of capital) used to calculate the water tariffs which will adjust higher to compensate for the higher interest costs.

Thanks probability for the update article.

Basically what the management updated to analysts as highlighted in the article is in line with my understanding, the positive surprise is the confirmation that Jordan power plant has achieved full commercial operations and will soon receive some payments from the offtaker.

EPF just ceased to be a substantial shareholder of YTLP and still has some 400 million shares for potential sell off. Looking at its aggressive selling of 5m to 6m a day, it would probably take 67 to 80 days for EPF to completely sell off its stakes in YTLP.

Compared to YTL, EPF has been even more aggressive in selling, sometimes at over 20m shares a day, so its stakes in YTL should be low now. That's why we see YTL share has been running up more than YTLP which is capped by EPF selling.

@i3lucker, I am afraid that you were wrong on the valuation of utilities companies.

FYI, Keppel and Sembcorp are trading at PER of 13x to 14x.

The three water utilities companies that are listed in the UK are trading at PER of over 20x.

YTLP disposed off Electranet, an utility company, at PER of over 30x.

I hope you know what you were talking about.

Just be patient, and you will get a good time to accumulate YTLP as EPF is selling aggressively now and state elections are coming soon.

@probability, I have put in some comments in that article trying to answer your queries

In short, electricity prices tend to move in tandem with gas prices though at a lag. But Gencos' profit is typically locked in via CfDs with retailers and protected for 6 -24 months ahead.

As gas prices have fallen, we may see retails electricity prices to soften in 2-3 months ahead but it does not mean that Gencos will make less profit.

But if certain Gencos have locked in low gas prices for next 1-2 years ahead, and when gas prices do fall further, they may make less profit from the "extra" profit in the fuel component which they are not supposed to make at normal times.

I hope this helps to answer some of your queries.

@probability & @sslee, glad that you were having interests in knowing more about Singapore electricity market. Many analysts do not bother to understand it and simply treat it as a cyclic sector.

The figure of SGD259/MWh was the USEP averaged for Jan-Mar 2023 quarter in Singapore, as you may already know, USEP is the weighted average of electricity prices in all regions in Singapore over a certain period of time, for your info, electricity prices differ slightly in different regions in Singapore based on supply and demand in that region. To note that this average is for the half-hourly electricity wholesale prices which are cleared at the wholesale market every 30 minutes. This is a benchmark for some types of retails electricity contracts, which are priced at a small discount to the wholesale electricity pool prices.

There are various types of retails electricity prices besides the one I described above. Another type is a fixed-priced contract where electricity prices are fixed for a period of time, usually 6 months to 24 months. The other type of contract is a discount-off-tariff which is priced at a discount to the vesting contract price (which is itself the benchmark price used by the incumbent retails electricity supplier MSSL to supply electricity to households who have not switched to a private retailer).

Whatever type of electricity prices (wholesale or retails), there are two components in the electricity price - fuel cost and non-fuel profit margin.

Fuel cost is essentially the cost of generating the electricity which depends on gas prices and the efficiency of the power plant units. FYI, over 90% of power generation in Singapore is based on natural gas which is a mixed of piped gas from Msia/Indonesia and LNG (liquified natural gas) imported from various countries.

Usually the fuel cost component makes up the bigger part of the electricity price, eg. SGD180/MWh vs SGD79/MWh in the average USEP of SGD259/MWh.

When gas prices drop, then electricity prices drop. TO note that vesting contract price and the MSSL supply price to HDB flats for a quarter are based on the average gas prices in the prior 2.5 months, eg. vesting price for April-June quarter is based on average gas prices for 1st Jan - 15 Mar. So you always see a lag effect in the electricity prices to HDB flats or vesting prices from falling or rising gas prices.

Gencos in Singapore makes the bulk of their profit from the non-fuel margin, very little from the fuel cost component unless their gas units are more efficient than others.

Gencos typically have contracts-for-differences (CfD) with their own retails supplier to hedge against the fluctuation of the wholesale electricity prices, i.e. they price the generated electricity at their fuel cost + non-fuel margin for their retailer to sell to customers. In this way, Gencos' profit is more or less certain for the period where their generation has been hedged with their retailer, typically for 6 months to 24 months. Usually their profit is not affected by the fluctuation of the gas prices or the wholesale electricity prices. But as part of their generation is still covered by vesting contracts, so their profit margin to certain extend is based on the non-fuel margin agreed at the vesting contracts.

When supply is tight, wholesale pool prices tend to trade high, especially when all the efficient combined-cycle plants have been running max and the less efficient open-cycled unit or oil-fired units are required to run setting the marginal price at the pool. As such open-cycled unit or oil-fired unit is usually not required to run and hence not contracted for differences with the retailer, so that generation from such less efficient units will need to be priced higher at the pool to cover their higher generation costs plus an ad-hoc profit margin. This ad-hoc profit margin can sometimes be very very high when pool prices spike to like SGD1,000/MWh or at occassions max SGD4,500/MWh for a couple of hours during peak hours.

Well said @xiaochen.

Your analogy of Singapore electricity rates and air tickets is appropriate. Electricity prices will rise when supply is tight, and will fall when demand softens.

@cktay, as what you pointed out, Lafarge cement used to make RM120m pretax profit a quarter, now MCement is larger than the then Lafarge, hence higher revenue. If Mcement gets its cost hedging right, it is not surprising for it to make RM120m pretax every quarter.

But there are always challenges in any growth story for a company. In the case of YTLP, it faced great challenges in the Jordan project during construction during Covid-19 times and then encountered counter-party challenges when it was about to complete the construction. The case is still pending an international arbitration judgement but Jordan needs power so YTLP's plant was required to run up anyway. Then Wessex Waters was hit by high inflation and high interest rates that eroded almost all its profits in past 2 quarters. These challenges test the wisdom of the management.

PowerSeraya is on high ground now as the electricity supply is tight and hence generation and retails profit margin is good. But before that, it was hit by over-supply situation that pushed it into losses for several quarters, and there was nothing it could do about it besides cost cutting and capital preservation. There will be challenges in the future for sure, eg. the RE power import by 2035, you need to get satisfied with the ability of the company management to deal with such challenges and ensure the long term growth and viability of the company.

@yong1985cm, my intention of putting up the comparison of Press Metal vs YTLPower was not to derate PM, but rather to highlight the possibility that YTLP may be re-rated to similar level of PM, both of which are great companies.

I first bought into PM when its first phase aluminium plant started commercial operations in Sarawak back in 2000s, and I have made almost 7x by holding onto it for few years. I admired the vision and bold decision of the boss and thought that the cheap electricity it capitalised on in Sarawak would give it great competitiveness against regional players.

Now I see another growth story in YTLP, just like what we have witnessed in PM. Don't miss the boat!

@goody99, it is normal for analysts to be skeptical of the super strong Q3 of YTLP as PowerSeraya earnings were beyond my own most bullish projection. But after I back calculated, it turned out to be entirely logical for PowerSeraya to make such a gross profit of S$80/MWh during tight supply market.

As I stated before, gross generation margin averaged at S$60-80/MWh during the tight market in 2009-2013, so it is possible for generation margin to fluctuate between S$60/MWh to S$80/MWh during this tight supply market. So don't be surprised if PowerSeraya earnings get pulled back by S$30 million in Q4, that means gross generation margin softens to S$70/MWh. On the other hand, it is equally possible for gross generation margin to strengthen further to S$90/MWh which will add S$30 million of profits.

Anyway, let the number speak for itself in late August then.

The projections above are based on latest quarterly results and my own calculations of future contributions from green data centre and digital bank, don't quote me on that. I may be over bullish or under appreciating the earnings contribution just like I missed on the strong earnings of PowerSeraya.

@Zhuge-Liang, very roughly my projections are as follow. By FY2024, I am projecting for:

1) PowerSeraya to report similar level of PBT of around RM800 million to RM1.0 billion a quarter
2) Wessex to report normalised PBT of RM130-170 million per quarter
3) 1st phase green data centre to contribute PBT of RM10-15 million per quarter, subsequent phases to contribute PBT of RM50-75m a quarter from FY2025
4) digital bank business to contribute PBT of around RM10-20 million per quarter
5) Jordan power is fully commissioned by then and contribute PBT of RM50 million per quarter

SO if we add up the above, PBT will top RM1,050 - 1,200 million per quarter, annualised to RM4.0 billion to RM4.8 billion a year.

After tax profit may be around RM3.0 billion to RM3.6 billion resulting in EPS of 35 sen to 45 sen.

Cashflows will be around RM4.0 billion a year or 50 sen per share, supporting dividend payouts of minimum 25 sen.

So at 5% dividend yield, YTLP should trade to RM5.00 per share, or at PER of 11x to 15x.

@Alwinb, I have suggested once for PowerSeraya to consider retrofitting some of its gas turbines to be able to burn green hydrogen which may be produced in Malaysia in the future, as I noticed that Keppel had already announced to go ahead with its new hydrogen-powered turbine to come in around 1H2026.

I hope PowerSeraya does look into such a possibility to see if it will be feasible to do so.

@cktay, the current government is keen to revive the HSR as this is the rationale thing to do to super charge the economy as huge construction work will flow through to various other industries. But the problem is no money. Here is where private companies with big balance sheets like YTL and Gamuda come in and bring in technical and funding partners from China or Japan.

But the sentiment is now spoiled by the coming 6 states election and threats of the green wave and Bersatu coming back to power. Dindin was the one who terminated the earlier HSR agreement with Singapore and paid out the compensation.

It looks to me that someones may have bet on a "good news" on HSR yesterday but it didn't come out last night, so these someones cut their positions on YTL and Gamuda.

It is good to see healthy correction in YTL share price today, so that it flushes out short term traders and weak holders. The next rally will be able to sustain longer after these short term traders are out.

We are in for the long term earnings growth and sustainable strong cashflows that will support dividend payouts of 10 sen or higher for many years to come, so a little noise along the way is a good chance to add more.

I will not debate further with you on PM as this is a stock I will not invest in at current share price level. You may find some comfort from fellow investors in PM stream of commentary. But here, we are all for YTL.

Don't get me wrong. I do think PM is a great company and the boss is visionary.

But the point of discussion here is whether the stock price will have chance of going higher. The stock market is future looking, if the earnings of the company do not grow the stock price will not rise.

If earnings drop, the market is ruthless in punishing the company by dumping the shares. Just like what happened to YTL in past few years when earnings were depressed. Now outlook of YTL earnings is looking bright and I am confident share price will rebound.

But the same thing cannot be said of PM. Based on RHB report on PM, the analyst said PM drop in earnings was due to weakening prices of aluminium to RM2200/tonne from recent peak of over RM2400/t. Nobody can tell you whether aluminium prices will go back up to RM2400+ or go down further towards RM2000. In the latter case, you will find PM share prices dropping another 20% or more from current level.

If aluminium prices drop back to RM1800 or below where it came up from few years ago, then it won't be a surprise to see PM share price dropping back to RM2.00 level where it came up from.

@yong1985cm, you still don't get the point.

Press Metal may have been a growth stock in past few years due to its production expansion and rise in aluminium prices. But plant expansion may have come to an end, as I have not heard any expansion plan from PM management for near future.

Now come to the revenue growth, PM revenue is entirely tied to global aluminium prices which the company has absolutely no control over, as it is a commodity, no matter how capable the management is. You have no idea how global aluminium prices are going to move in next few months or next few years, not even the company management or the boss himself. They cannot promise you on any revenue growth or earnings growth if aluminium prices do not go up. Nobody can guarantee or promise you any growth, you can stick to your own conviction but there is nothing else you can do about it.

The latest 30+% drop in earnings of PM latest quarterly result already gave you a warning, if you still do not wake up, nobody can help you.

Go check out latest research reports from all the analysts and you will see what I mean.

EPF sold 10m shares of YTLP last Friday when total volume traded on that day was 40m. Now EPF is left with just 5.03% stake in YTLP, soon will cease to be a substantial shareholder. I estimate that EPF's stake in YTL Corp has reduced to probably just 1% or lower after relentless selling in past few weeks. It has made a mistake in selling YTL too early, now making another mistake in selling YTLP.

Whatever it is selling has been morked up by a bigger foreign fund, looking at the last minute buy volume of over 5 million just now that pushed YTLP to close at day high of 1.36.

Soon when EPF is left with 1% or so stake in YTLP, we will see the share price of YTLP jumping as fiercely as YTL shares now.

Q3 core net profit is 18% higher than last year. Prospective PER only at 7.0x. Prospective dividend yield at 13.88% based on CIMB projection