dragon328

dragon328 | Joined since 2021-06-01

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Stock

2 months ago | Report Abuse

@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.

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2 months ago | Report Abuse

@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.

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2 months ago | Report Abuse

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.

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2 months ago | Report Abuse

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.

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2 months ago | Report Abuse

@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.

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2 months ago | Report Abuse

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.

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2 months ago | Report Abuse

@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.

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2 months ago | Report Abuse

@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.

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2 months ago | Report Abuse

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.

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2 months ago | Report Abuse

@cgtan2020, do not expect many of the local analysts to raise the tp for YTL Power. You can see from the commentary from these analysts in the TheEdge article above.

Having missed out on the strong earnings rebound of YTL Power, these analysts will be reluctant to raise target prices much. You can see that the narrative from them is quite similar, more so like a collaborative effort to downplay the earnings growth of YTLP.

One said for 2-year retails contracts locked in early/mid 2022, PowerSeraya earnings may have peaked. What kind of bullshxt is this? The fact is that PowerSeraya earnings started showing strong rebound in early 2023 (remember PowerSeraya reported PBT of RM290m in Sept 2022 qtr, PBT of RM301m in Dec 2022 qtr, PBT of RM806m in Mar 2023 qtr, PBT of RM1067m in June 2023 qtr, PBT of RM1025m in Sept 2023 qtr), and not early 2022 as this analyst stated.

I guess this is how they try to justify a low valuation for YTLP by projecting that PowerSeraya earnings have peaked and will normalised down very soon. But they will get beaten down again next month when YTL Power announces the Q2 FY2024 results.

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2 months ago | Report Abuse

@cgtan2020, stock market is always forward looking, that's why I use the prospective earnings of FY2024 & FY2025, rather than the rolling 4 past quarterly results. Just as ones would not use the past earnings of glove stocks in 2021 to value them.

My earnings estimate for YTLP FY2024 does not even include a potential turnaround of Wessex Waters. For the projected 40 sen EPS for FY2024, I just assume zero earnings contribution from Wessex Waters, until I see more convincing turnaround in Q2 FY2024 or Q4 FY2024 after the next water tariff hike.

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2 months ago | Report Abuse

@probability, you are right that most analysts are struggling to evaluate the potential upsides from YTLPower-Nvidia tie-up in AI data centres, myself included. I guess we may have to wait till the 1st phase of these AI data centres to be up and running in mid 2024 then only we can have firmer estimates of its earnings contributions.

If it turns out to be significant, then YTL Power may turn to be more like a tech stock which typically enjoys PE ratios of 21 times as the article suggests.

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2 months ago | Report Abuse

Local analysts are still promoting glove stocks like Harta and Kossan, and tech stocks like Inari. You can check the valuation of these counters too.

They are not promoting YTL Power for reasons only known to themselves.

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2 months ago | Report Abuse

Despite the strong share price run up in 2023, YTL Power is still the most undervalued big cap in Bursa by far.

I have done the comparison with Tenaga, PetGas & Dialog earlier, you can check the same with PMetal, TM, Nestle, PetDag, MISC, other utilities counters to see how high their PER are.

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2 months ago | Report Abuse

40 sen EPS for FY2024 and FY2025 still has not included any contribution from the new AI data centre, WTE plant, any profit from Yes and digital bank, MLFF if materialised, Brabazon project in the UK, equity account of any profit from Ranhill and subsequent phases of data centres in Kulai and potential RE export to Singapore.

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2 months ago | Report Abuse

PER is still below 7.0x based on projected EPS of 40 sen in FY2024

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2023-12-29 11:59 | Report Abuse



Good article!

It does not seem to be possible to leave a comment at the bottom of your blog post, so I just post my queries here.

May I know if you have a breakdown of revenue for domestic and non-domestic consumers of PBA? This is to estimate how much revenue increase should PBA secure a water tariff hike for domestic consumers.

Do you expect the positive tax rate to continue in coming quarter(s)?

Posted by dollardollarbill > 19 hours ago | Report Abuse

PBA Holdings Bhd: (P)rofits to (B)ecome (A)bundant?
https://klse.i3investor.com/web/blog/detail/dollardollarbill/2023-12-28-story-h-211507880-PBA_Holdings_Bhd_P_rofits_to_B_ecome_A_bundant_dollardollarbill

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2023-12-29 10:03 | Report Abuse

Good to see Genting Singapore breaking up SGD1.00 again. Hope it will stay above and retest pervious highs soon.

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2023-12-29 10:01 | Report Abuse

@fx115w, lets make it 2 pints! Cheers!

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2023-12-22 09:26 | Report Abuse

@xiaochen, share trading using AI has been very popular in China of late, and Singapore is catching up too. If fund managers use AI in picking stocks in Bursa, they will know YTL Power is so much under-valued at current prices, as computed by SimplyWt below:

https://finance.yahoo.com/news/opportunity-ytl-power-international-berhads-022543455.html

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2023-12-22 09:26 | Report Abuse

@xiaochen, share trading using AI has been very popular in China of late, and Singapore is catching up too. If fund managers use AI in picking stocks in Bursa, they will know YTL Power is so much under-valued at current prices, as computed by SimplyWt

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2023-12-22 09:25 | Report Abuse

@xiaochen, share trading using AI has been very popular in China of late, and Singapore is catching up too. If fund managers use AI in picking stocks in Bursa, they will know YTL Power is so much under-valued at current prices, as computed by SimplyWt below:

https://finance.yahoo.com/news/opportunity-ytl-power-international-berhads-022543455.html

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2023-12-22 08:45 | Report Abuse

@TimiraosL, now on hindsight, the news link you sent above is related to the story behind the selldown of bank stocks yesterday. You were sharp.

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2023-12-21 16:54 | Report Abuse

@TimiraosL, this looks like only affecting foreign banks?

But local bank stocks like Hong Leong Bank, CIMB and RHB are top losers today

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2023-12-21 16:00 | Report Abuse

Does anyone know why bank stocks are under heavy selling today?

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2023-12-21 10:01 | Report Abuse

@Fundamental Trader, the debt level at YTL Power is not a concern, as most of the debts are sitting at and ring-fenced at the various asset level, eg. about SGD2.0 billion or RM7.0 billion at PowerSeraya, about 2.6 billion pounds or RM15 billion at Wessex Waters etc. These debts are being served by the respective asset unit, hence will not have any resource to the holding company.

For instance, the 2.6 billion debts at Wessex constitute a gearing level of about 65% at Wessex, which is a norm among UK water companies and approved by Ofwat and bond holders. Wessex Waters' operating cashflows are more than sufficient to serve these debts.

YTL Power had total debts of RM29.9 billion and gross cash of RM8.2 billion as of 30 Sept 2023, or net debt of RM21.7 billion. These are backed by total assets value of RM57.7 billion.

You would have noticed that the total debts have come down by almost RM2 billion in just the 3 months from 30 June 2023 to 30 Sep 2023, indicating that YTL Power's operating cashflows are very strong.

This is evidenced from the strong operating cashflows of RM1.7 billion in the Q1 FY2024 (Sept 2023) quarter, minus out capex of RM956m, free cashflows amounted to RM750 million a quarter. Annualised to RM3.0 billion, such free cashflows will be able to support a fat dividend payout of RM1.0-1.2 billion a year, with the rest towards debt repayments.

Total debts will come down gradually especially at PowerSeraya level given the strong earnings in Singapore, and also at Jordan Power project company level as project debts get gradually paid off. Wessex will need to incur more debts to fund the capex plans for 2025-2030 while maintaining a healthy 65% gearing.

FYI, YTL Power is in net cash position at the holding company level.

Now can you tell me how much debts there are in Tenaga? I tell you, total debts are at RM64 billion vs cash of only RM13 billion and equity value of RM61 billion. Isn't it also debt > cash, and debt > equity? You should be more concerned with Tenaga cashflows as it still has a huge receivables amount of over RM26.8 billion, most of which are owed by the government.

Maxis had total debts of RM9.9 billion but cash only of RM628 million as of 31 Dec 2022, shareholders' equity was only at RM6.3 billion way lower than total debts. Are you concerned?

Malakoff had total debts of RM8.8 billion and cash of RM2.2 billion as of 31 Dec 2022, shareholders' equity stood at RM6.7 billion also lower than total debts. Are you concerned?

Capital A had total debts of RM17.9 billion but cash of only RM525 million as of 31 Dec 2022, shareholders' equity is negative RM5.77 billion. Why are investors not concerned??

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2023-12-20 20:44 | Report Abuse


@harvest6138, this is the good news that we had been waiting for.


With UK inflation cooling off, we can expect no more provision for index-linked bonds in coming quarters. Furthermore, UK bond yields immediately dropped 20 bps.
Wessex Waters will be able to save some interest costs going forward, and if it can contain the operating costs, we can look forward to a turnaround as soon as this Dec quarter.

  Posted by harvest6138 > 3 hours ago | Report Abuse

https://klse.i3investor.com/web/blog/detail/kianweiaritcles/2023-12-20-story-h-212279816-UK_inflation_falls_far_more_than_expected_lowest_since_Sept_2021

this may benefit YTLP as well ..

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2023-12-20 20:36 | Report Abuse

@Ravi Kumar, you are most welcome. Give yourself a clap for having held onto YTL shares for so long. We have since collected 4.0 sen dividends for FY2023, and are going to receive much more in years to come.

Have a good evening

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2023-12-20 17:21 | Report Abuse

My suggestion is that if you missed out on the earlier rally in YTL or YTLPower share price, now do some research and then grab some tickets. It is never too late for long term investments.

You will find yourselves rewarded with handsome capital gains and fat dividend payouts from FY2024 and years to come.

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2023-12-20 17:16 | Report Abuse

@willc48, pls be more specific and provide some facts. Do not simply smear the image of a company.

For the record, YTL group has paid out a total of over RM28 billion in past decades. Only YTL itseld paid out RM1.0 billion of dividend in FY2015, FY2016 and FY2017.

Can you tell us which company else is more generous in dividend payouts?

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2023-12-19 16:05 | Report Abuse

@sii581024, thanks for the confirmation on peak power demand of H100 GPUs. As said earlier, I am no expert on AI nor data centres, and am still struggling to learn more. I was just trying to calculate the implied capex for the AI data centre based on the power requirement of H100 GPUs. I have more clues now.

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2023-12-18 21:52 | Report Abuse

But on the power supply requirements, I want to clarify that my earlier assumption of 6 x 3300W for the H100 GPUs was taken from the "Introduction to Nvidia DGX H100 System" document.

It says " The DGX H100 system contains six power supplies with balanced distribution of the power load. ... The system includes six power supply units (PSU) configured for 4+2 redundancy.

Refer to the following additional considerations:

- If a PSU fails, troubleshoot the cause and replace the failed PSU immediately.
- If faulty PSUs must be replaced, the system should be idle or shut down the system and install operational PSUs.
- If three PSUs lose power as a result of a data centre issue or power distribution unit failure, the system continues to function, but at a reduced performance level.
- If only three PSUs have power, shut down the system before replacing an operational PSU
- The system only boots if at least three PSUs are operational. If fewer than three PSU2 are operational, only the BMC is available.
- DO not operate the system with PSUs depopulated.

It all means to me that though a standard DGX H100 has a peak power demand of 10.5kW, but the standard installation requires 6 x 3300W power supply units. Though only 4 PSUs are required at a time, it still calls for another 2 PSUs as redundancy. So whether you like it or not, data centre operators will need to prepare 6 x 3300W or total 20kW for a DGX H100 system.

It is just a matter of convention as to whether you use the total PSU rating or use just the nominal peak power demand of 10.5kW. For my earlier calculations, I have just used the total 6 x 3300W as the power requirements.

Hope this clarifies.

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2023-12-18 21:26 | Report Abuse

@cgtan2020, yes those chinese or Singaporean firms will just need to subscribed for the AI data centre cloud services, or simply enter into long term lease (8 to 10 years) with YTLP's AI data centre space at Kulai to secure assess to Nvidia GPUs. It will be better than trying to source those GPUs from various markets at sky high prices.

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2023-12-18 15:25 | Report Abuse

@wkc5657, your calculations above sounds about right.

The statement last Friday did say that the 1st phase of the AI data centre would be ready by mid 2024, so you are probably right that it will likely use the remaining capacity of the hyperscale data centre after the SEA's 48MW. The 1st phase of the AI data centre is likely in the tune of 8MW module, and more capacity will be added progressively over the next few years.

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2023-12-18 12:10 | Report Abuse

The article also says Equinix, the largest data centre operator, is going to see its revenue jumping up from its current revenue of $8 billion a year.

Wikipidea says Equinix had invested over $25 billion capex by 2018 and it was doing revenue of around $5 billion in 2018, now doing $8 billion per annum.

This implies that annual revenue could be as high as 20% of capex spent, so for total investment of RM20 billion for YTL-Nvidia deal, the JV could earn up to RM4 billion revenue a year when fully developed.

Equinix recorded an adjusted EBITDA margin of around 50% for the 3 months ended 30 Sept 2018. So for the RM20b investment, YTLP JV in the AI data centre might see operating cashflows in the region of RM2 billion a year when fully developed.

This is another angle of doing a high level estimation of potential earnings impact from this AI data centre deal. It could be way higher or way lower than actual, only time will tell.

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2023-12-18 11:55 | Report Abuse




@PresidentLOL, thanks for the news link.

The article says there will be another 6GW of data centres in demand in next 3 years, representing $12 billion of revenue opportunity for data centre operators.

This implies an average revenue of $200 million p.a. for a 100MW data centre operator. Assuming operating margin of 50%, this points to a potential profit of RM450 million p.a. for a 100MW data centre.
Mr. OTB, that will partly answer your question above.

Posted by PresidentLOL > 2 hours ago | Report Abuse

https://www.schroders.com/en-us/us/individual/insights/how-ai-is-set-to-accelerate-demand-for-data-centres/

This could be a good read to understand more about AI Data centre & it's potential.

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2023-12-18 10:53 | Report Abuse

Whether YTLPower can get a special price from Nvidia for the H100 GPUs does not matter much, as it is most likely that the costs of supplying the GPUs would be considered as equity contribution by Nvidia into the collaboration JV.

If we calculated above using GPU price tag of RM350k per piece, we get an investment cost of RM7.0 billion and YTLPower's part of investments on land, infra, data centre facilities & power supply will amount to RM1.5-2.0 billion, so Nvidia would be seen as contributing the bulk of the equity.

If YTLP asked for the price range of USD30k-40k per GPU, then Nvidia's supply cost of GPUs for a 50MW AI data centre would come down to RM3.5b-4.0 billion, then the equity proportion between YTLP and Nvidia would be more palatable.

I am just guessing, having no clue of the shareholding structure.

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2023-12-18 10:47 | Report Abuse

@cgtan2020, the official list price for Nvidia H100 GPU may be at USD30k to USD40k, but the issue is that the international market cannot get enough of it and is willing to pay huge premium for the GPUs.

I hear from sources saying that GPUs can fetch a price of easily USD80k in China as chinese firms are not allowed to source directly from Nvidia due to US sanctions.

The RM350,000 price tag was obtained from online quotes in Malaysia. You can check your own sources.

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2023-12-18 10:44 | Report Abuse

@Alex Chua, the statement said it clearly that the AI data centre will be owned and managed by YTLPower's 60% subsidiary YTL Comms, I am not sure of the other 40% shareholders in YTL Comms.

For the 500MW solar power park, I remember YTLPower owns some 60% to 70% stake with the rest owned by another company.

So the data centre business and the solar power park have different shareholders' structure.

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2023-12-18 08:33 | Report Abuse

@xiaochen, I would add a bit more on the AI data centre total investment cost estimates.

As stated above, a standard 8 x H100 GPU rack typically requires power supply of 3 x 3300 watts or about 20kW. So a 50MW AI data centre would accommodate 50,000/20 x 8 = 20,000 H100 GPUs.

At current market price of RM350,000 per GPU, the investment costs for a 50MW AI data centre would top RM7.0 billion just on H100 GPU costs alone. We need to add other data centre equipment, storage chips, power supply, cooling, land and infrastructure costs which may easily add another RM1.5 billion (same like the first phase of 48MW traditional data centre being built for SEA Group). So for a 50MW AI data centre, total investment costs may be as high as RM8.5 billion.

In next few years, if YTLP-Nvidia JV could progressively find more customers for the AI data centre services, and expand to 100MW - 150MW, total investments may top RM20 billion.

Then that will leave another 300MW capacity at the Kulai site to be developed for other data centres, which may cost another RM5 billion.

When fully developed, the entire Kulai park will attract total investments of RM25b to 27 billion based on my calculations above.

Please see if my estimation above makes any sense to you.

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2023-12-16 17:15 | Report Abuse

@Uniholder, I would change it to dragon728 few years later, haha.

Okay guys, time for some exercise out. Have a pleasant weekend!

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2023-12-16 17:13 | Report Abuse

@iPlay, that's the message I would like to convey to all. YTL is helmed by a visionary leader and managed by capable management team. Hold for long term.

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2023-12-16 17:10 | Report Abuse

I think if you are long term investors, at least with a view to hold it till 2031 to see through the Sentosa 2.0 expansion, you need not worry too much for another lockdown.

Just like what we have seen, Genting share was trading at as high as RM9.00-10.00 before the pandemic then collapsed to a low of RM3.00 now up to RM4.70. If there were to be another lockdown in 2024 (though I think the chance is low), the lockdown would not be as severe as in 2020. And you would bet Genting share price would at worst fall back to RM3.00 level.

But if the lockdown did get lifted off in 2024, and Genting Sentosa 2.0 expansion gets full stream ahead in coming years, then we may potentially see Genting share price rising back to RM9.00-10.00 level as before the pandemic, or even higher to RM20.00 if its expansion plans go well ahead.

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2023-12-16 17:05 | Report Abuse

@keyman, I am not sure if there will be another lockdown in Singapore, no one knows at the moment, I guess this is the risk investors need to assess for themselves. I have no answer to that.

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2023-12-16 17:04 | Report Abuse

Singapore dollars again rose past RM3.50 yesterday. With Singapore economy expected to grow strongly, Singapore dollars are expected to remain strong in coming years.

Singapore dollar was exchanging at RM2.20-2.25 back in 2012-2013, and has strengthened over 59% against the ringgit over the past 10 years.

Who knows how much Singapore dollar may be by 2031-2033 when Sentosa 2.0 expansion completes and Genting Singapore EBITDA hit SGD1.8 billion a year. Genting Singapore is expected to remain in net cash position by 2031-2033 as its operating cashflows are strong (over SGD1.0 billion a year from 2024) and sufficient to fund its expansion capex (remaining SGD5.3 billion to be spent over next 8 years). Allowing for 4 sen dividend every year (or SGD480 million), Genting Singapore will still have over SGD500 million operating cashflows a year to fund the capex (averaged at SGD660 million a year) as it has net cash of SGD3.3 billion now.

So by 2031-2033, Genting Singapore free cashflows may top SGD1.8 billion a year (as no interest expenses but may have interest income), and if multiply by the exchange rate then say at SGD1.00:RM4.00 then it may have free cashflows of RM7.2 billion a year available for dividend payouts. For its 52.5% stakes in Genting Singapore, Genting Bhd will be entitled to potentially RM3.8 billion of dividend payouts from Genting Singapore (if 100% payout ratio). That would be almost RM1.00 per share of dividend for Genting Bhd shareholders every year then!! At 5% dividend yield, Genting Bhd could be trading at RM20.00 per share then.

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2023-12-16 16:48 | Report Abuse

@pang72, don't forget the potentials for Genm to successfully dispose off its Maimi land in next 2 months and clinching of a lucrative New York full casino licence.

If US Fed starts cutting interest rates from March 2024 as the market prices in now, we can expect meaningful reduction in interest expenses in Genting from 2024 as it gradually rolls over its debts.

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41 minutes ago | Report Abuse

Mr. OTB, what I meant by S$30m/MW was the valuation of traditional data centres based on the recent deal by Singtel. What you calculated above (RM34.12 billion) for 250MW of AI data centres was correct if based on 30% premium.

But that is the valuation if we are to value the AI data centre business, i.e. if YTLP were to dispose off the AI data centre business to another party.

But to calculate the potential earnings, I was using ROI which is the return on investment. I used a figure of RM20 billion as the total investment costs for the AI data centres, and assumed a 15% ROI so I got a pretax profit of RM3.0 billion a year.

I was just trying to give some figures to the earnings potential of this Nvidia deal, and I may be way way off eventually, either far too high or far too low, I have no idea. So please don't quote me for that.

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2023-12-16 16:30 | Report Abuse

You see while PowerSeraya continues to surprise analysts with its strong earnings every quarter, Wessex has submitted an aggressive capex plan for the next regulatory period from 2025 to 2030 and UK inflation is cooling off.

You also saw the Israel-Hamas conflicts driving up crude oil prices in Oct then gas supply got disrupted to Jordan, and YTLP's Jordan oil shale-fired power plant was running to the max in recent weeks.

We saw YTLP quietly got the award for the RM5.6 billion WTE plant in Selangor, which will provide another stream of long term earnings to YTL Power for next decades. So far, no one has factored in any profit contribution from this segment yet.

Then we saw YTLP buying over a 18.89% stake in Ranhill from a Singapore fund and subsequently raising its stakes to 21+% to equity account Ranhill earnings. No one has built in any earnings contribution yet from this segment as well to YTLP earnings from FY2024.

Then we had the multi-billion MLFF news which is still under negotiation stage with highway concessionaires.

Recently we had this significant deal with Nvidia on AI data centres which the market has so far failed to appreciate.

There may be some other projects under development at YTL Power, which we are not aware of yet. For instance, they may be working on potential projects to export RE to Singapore, as news has been scarce since Singapore EMA launched the tender process few months ago.

Yes 5G may be on the brink of turnaround and may start contributing meaningful profits to YTLP from 2024. We can also expect to see higher earnings contribution from Jordan from 2024. Wessex may be able to secure its proposed 30% hikes in water tariffs from 2025 if its proposed capex plan gets approved in 2024.

So many things are happening in the company. With a gross cash of RM9 billion ready to deploy for M&A and future developments, YTLPower is for sure in for exciting growth periods.

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2023-12-16 16:17 | Report Abuse

Things are developing fast at YTL Power and faster than what we can catch up in understanding and what the market can appreciate.

With the share price back to last Friday level, it seems that the market has failed to realise and appreciate the huge potential of AI data centres. No analyst has given much value to the latest deal with Nvidia, only a couple of analysts acknowledged the significance of the deal but did not dare to attach big value to YTLPower as I think not many people know how to value it. Furthermore, the market is full of short term traders and investors with very short span of investment horizon, so it is natural for people to take profit after the news.

But I believe the YTLP management can deliver a good deal from this tie-up with Nvidia, and see that the current share price weakness is a good opportunity for long term investors to gain entry. You never bet against Nvidia CEO Jensen Huang and YTLP MD Dato' Yeoh individually, let alone working together!