@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.

@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.

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

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

@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.

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.

@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.

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.

@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.

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.

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.

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!

@xiaochen, I am no expert in AI nor data centre, we can all learn together.

I am more inclined to think that the RM20b investment is related to the AI data centre deal with Nvidia alone.

The original RM15bn investment was based on the initial RM1.5b investment for the first phase of 48MW with SEA Group for traditional data centre.

Now with AI data centre deal with Nvidia, the total investment for the Kulai park will need to be revised upwards.

@MrFox, when I projected last year that PowerSeraya could earn a pretax profit of SGD200m to 230m a quarter, people laughed and not many believed.

But the numbers speak for itself, PowerSeraya made a pretax profit of over RM1.0 billion in the most recent 2 quarters. It is going to make more in this Dec quarter.

We don't know much about this AI data centre deal, only some big figures floating around. But we cannot discount the possibility that this may become another significant earnings contributor to YTL Power in years to come.

It is by no mistake Nvidia market cap is over USD1.0 trillion and YTL Power market cap has expanded by over 240% YTD. They are both led by visionary chieftains and capable management team.

Just a wild guess, at 15% ROI, this AI data centre deal with Nvidia could potentially generate pretax profit of 15% x RM20b = RM3.0 billion a year when fully developed.

The earnings contribution from the data centre business segment would be as high as PowerSeraya later. Exciting times indeed!

@xiaochen, it is possible for this deal alone with Nvidia to hit RM20 billion. Here is why I think it is possible.

It is not fair to use the cost of building super-computers alone to compare to AI data centres which contain supercomputers, storage equipment and chips, AI cloud computing equipment and softwares, and lots of Nvidia H100 GPUs.

An online check shows that one H100 GPU can cost up to RM350,000 each. One rack of 8 x H100 GPUs requires 6 x 3,300 watts (or 20kW) of power supply. The proposed AI data centre deal by YTLPower with Nvidia would require thousands of Nvidia H100 GPUs and easily 50MW of green power supply, I estimate.

Based on the most recent deal on data centres, in which Singtel sold a 20% stakes in its regional data centre business to US KKR Group, it valued Singtel's data centre business at S$5.5 billion or almost S$30 million per MW of data centre based on my calculation.

Now AI data centres are much more valuable than traditional data centres which are used to store data, garbage or useful data. AI data centres can process raw data and turn it into useful data. I estimate AI data centres should be valued at at least 30% premium to traditional data centres.

Even if I stick to S$30m/MW, a 50MW AI data centre would be worth S$1.5 billion or RM5.25 billion. A 30% premium would value it at SGD2.0 billion or RM7.0 billion.

The proposed collaboration with Nvidia is for a long term period of easily 8 to 10 years which is the typical duration of data centre leases. So we cannot rule out the possibility that over the next 8-10 years, YTL-Nvidia will be able to find more customers for their AI data centres to the tune of 150-200MW capacity (note that YTLP Kulai green data centre park still has spare capacity of over 250MW left).

So total investments could easily hit RM21b to RM28 billion over next 8-10 years.

As AI data centres are the new thing high in demand now, I guess the return on investment ROI would be at least in the high teens.

Genting Singapore EBITDA exceeded SGD 350 million in the latest quarter ended Sept 2023, hence it has outperformed my earlier projection of yearly EBITDA of SGD1.4 billion (as stated in my earlier report in Jan 2023).

In the absence of any further lockdown, Genting Singapore earnings will only expand in coming years as it rolls out Sentosa 2.0 expansion till 2031. It is scheduled to add over 700 hotel rooms in next few years from current 1,600+ rooms, so a 43% expansion in next few years.

It achieved non-gaming revenue of SGD230 million in the latest quarter, annualised to SGD920 million. This non-gaming revenue is expected to increase by 40% or more in coming years due to the scheduled hotel room additions, or an increase of SGD400 million a year.

It achieved an EBITDA margin of 50% in the latest quarter, assuming the same EBITDA margin, its EBITDA is going to increase by another SGD200 million a year just from non-gaming segment alone.

If its gaming segment also increases by similar quantum, then total EBITDA may hit SGD1.8 billion in a few years time. Genting Singapore is still in net cash position with SGD3.3 billion of cash, so enterprise value would top easily 8 x SGD1.8b + 3.3 = SGD 17.7 billion.

At current share price of SGD0.99, Genting Singapore is worth 12.094b x SGD0.99 x 3.50 x 52.5% = RM22.0 billion to Genting. This is already higher than current market cap of Genting at RM18.22 billion.

This means investors are getting Genting Malaysia, Genting Plantation, Resorts World Las Vegas, and its oil & gas and power businesses for free!

@ValueInvestor888, I don't much more info on this Nvidia tie-up other than what you know, as details on this deal have been scarce.

I will just try to guess what the potential benefits for YTL Power.

First, it may be a joint investment by YTLP and Nvidia in new AI data centres which will be leased out to MNCs, just like the first phase of 48MW is leased to SEA Group on long term basis. The advantage YTLP will have is the access to Nvidia GPUs that are high in demand globally. And AI data centres are much more valuable than traditional data centres which are used to store all sorts of data only. AI data centres can process huge volumes of raw data and turn it into useful data.

Secondly, YTL Comms will provide cloud-based AI computing services, machine learning products, innovative AI cloud services, Malay-language versions of cloud-based AI products. Potential customers are government agencies and MNCs.

As I wrote in my last article, traditional data centres are valued currently at around SGD30 million/MW, as witnessed at the recent Singtel's disposal of 20% stakes in its regional data centre business to US KKR Group. I guess AI data centres are easily valued at 30% premium to traditional data centres. Even if I take the benchmark of SGD30m/MW, a 50MW AI data centre will be valued at minimum SGD1.5 billion.

@KLV868, it is just a dual listing in Japan for YTL. It is exactly the same company and same assets, it is just that some % shares are listed in Japan to raise local money.

It is just like TopGlove which wanted to do a dual listing in Hong Kong for 10% of its shares some 2-3 years ago. It is mainly to get a higher valuation and to raise local money.

Nothing much to shout about my record. I did suffer paper losses with Genting earlier this year and cut loss on AEON. What I do is just to hold longer than others.

The new developments at YTL Power have been faster than what I expected few months ago.

Firstly PowerSeraya earnings have beaten my own bullish projections.
Secondly, Wessex Waters proposed capex for next regulatory period is much higher than I expected, and its quarterly result has turned around (as seen in latest Sept qtr) much quickier than the market thought.

Thirdly, YTLPower has accumulated over 20% stakes in Ranhill Utilities which have a champion asset in the water concession in Johor and power plants in Sabah

Forthly and the most significant one, YTLPower has collaborated with Nvidia in a tie-up for AI data centre projects at its Kulai data centre park. This is potentially an earnings explosion, the impact of which has not been appreciated much by local investors and analysts. But eventually foreign funds will know and value it properly.

Dear Mr. OTB, you are most welcome. I have not done much, it is your own analysis and faith in your own decision to have stayed invested in YTL Power until now. Applaud yourself.

Singapore dollars surged to almost RM3.60 yesterday before settling above RM3.50.

If this momentum continues to the end of this month, we can expect another set of stellar earnings contribution from PowerSeraya for this Dec quarter

Of course, the key driver for Genting today is the interest rate pause by US Fed yesterday and the projected 3 interest rate cuts for 2024 as signaled by Powell.

Genting finally breaks up RM4.70, patience has paid off.

Singapore dollars surged to a high of RM3.5897 yesterday before settling at RM3.5016 making a new record high against the ringgit.

If this momentum continues to the end of this month, we can expect a record profit contribution from Genting Singapore for this Dec quarter which is seasonally a strong quarter

Singapore dollars surged to a high of RM3.5897 yesterday before settling at RM3.5016 making a new record high against ringgit.

If this momentum continues to end of this month, we can expect another set of stellar earnings contribution from PowerSeraya to YTL Power.

@harvest6138, though this news is few months old but it is still correct in the sense that water companies in the UK have all submitted their aggressive capex plans for the next regulatory period from 2025-2030. In returns, water companies are asking for substantial REAL increase in water tariffs to compensate for the substantially higher capex required to fix the various flooding, sewerage and environmental issues there.

Wessex Waters have asked for a 30% increase in REAL water tariffs for 2025-2030, if approved the nominal increase in water tariffs will likely be higher than 30% given inflation adjustments every year going forward.

Ya, RM6.95 will definitely come, it is just a matter of time. Be patient.

I bought in Genting up to RM5.00 early this year but didn't feel depressed at all when its share price dropped to RM4.00. Instead I added more as I strongly believe Genting will soon break up RM5.00 soon. It is grossly under-valued now.

Its stakes in Genting Singapore is higher than its own market cap now, it means investors are getting the Genting Malaysia business, Genting Las Vegas, Genting Plantation, oil & gas business for free!!

@ChloeTai, no need to feel depressed. Have faith and you will be rewarded handsomely.

Genting will have its turn for a great rally. Genting Singapore broke up SGD1.00 this morning, investors are slowly waking up to the huge potential of its expansion programmes Genting Sentosa 2.0.

Another new high!

Those who read my article last week to buy a ticket and get on the YTL train are now sitting pretty on 20% paper gain. Just sit back and relax to let the journey continue.

But don't chase high, always aim for long term investment holds.

@Agjl, well said, fully agreed.

We are all here to make decent money from investments with our hard-earned money.

Have faith and hope Christmas come early to all!

https://www.edgeprop.sg/property-news/luxury-ski-chalets-prices-have-gone-44-highest-2014?utm_source=WeekdayEDM&utm_medium=email&utm_campaign=FREE

She adds that Niseko remains the top choice for skiing destinations in the Asia Pacific due to its location proximity, world-renowned powdery snow, year-round resort, retail, world-class restaurant amenities, and favourable dollar-to-yen exchange rate.

@keyman, that's right as YTL YTLPower have shown good progress in earnings rebounds and new projects, while Genting results had been disappointing until the recent Sept 2023 quarter, so it is just a timing issue.

My other stocks have mixed performance too, like BPlant is being taken over so no more upside but I have got close to 100% gain there. IGBB is doing well with share price touching year high, already up over 60% since I first recommended in Aug 2022. I have given up on AEON as the management does not seem to be proactive enough.

Now Genm Genting may see good catalysts ahead.

UK house prices rose for the second month in a row, according to one of
Britain’s biggest mortgage lenders, in a further sign that a lack of properties
for sale and cheaper borrowing costs are underpinning the property market.
Halifax said the average value of a home rose 0.5% in November to £283,615
(RM1.32mn), following an upwardly revised 1.2% gain in October. It left prices just
1% lower than a year earlier and roughly 3.5% below where they peaked in 2022.
(Bloomberg)

This is good for YTLPower's Brabazon property projects in Bath

The Bank of England will keep Bank Rate at 5.25% on 14 December and
through the second quarter of 2024, a Reuters poll showed, although a slim
majority of participants said risks were tilted towards the first cut coming
earlier than expected. British inflation cooled more than expected to 4.6% in
October from 6.7% in September yet economists as a group now expect only a
25 basis point cut in the third quarter compared to 50 basis points in a
November poll. (Reuters)

This will be good for Wessex Waters

Ya hopefully good news will keep flowing in for Genting in 2024, but a lot will also depend on whether the management will do the right things

@pang72, haha I have still been in the game since Jan. It is just that the market conditions were not ripe yet in 1H but I see great catalysts ahead for Genting.

Yes Genting Singapore will lead a higher growth in tourists receipts and earnings over next few years. As I forecast earlier, Genting Singapore would achieve EBITDA of S$1.4 billion for 2024. In the latest Sept 2023 quarter, it achieved EBITDA of over S$350 million, annualised to over S$1.4 billion better than my projection.

@KingKKK, seriously I do not know about the game plan of YTL on Ranhill. As they have got over 20% stakes, so YTL can equity account Ranhill's profits. Whether YTL will continue raising its stakes, I do not know but going by their long term investment strategy, YTL would typically try to get a controlling stake. How would they get there, I have no idea.

As for PBA, I am not familiar with its financials so no comment.

@Income, ya it is a bit long. If you don't have time, just read the First Boom & Second Boom then the last part.

The middle parts have been covered largely in my previous articles.

@Permutation, this is a tough question. I leave it up to you.

FYI, I have both stocks so I don't have to think hard to choose.

@pang72, MCement is definitely under-valued despite the recent run up. CIMB was quick enough to see the potential as demand for cement is picking up strongly from Malaysia and Singapore.

@Plantermen, thanks for the info. I am not quite familiar with KL city centre and have not been to TRX. Will explore later.

https://klse.i3investor.com/web/blog/detail/dragon328/2023-12-06-story-h-213241744-YTL_The_Growth_Story

For leisure read

https://klse.i3investor.com/web/blog/detail/dragon328/2023-12-06-story-h-213241744-YTL_The_Growth_Story

for leisure read

https://klse.i3investor.com/web/blog/detail/dragon328/2023-12-06-story-h-213241744-YTL_The_Growth_Story

Food for thoughts over lunch

https://klse.i3investor.com/web/blog/detail/dragon328/2023-12-06-story-h-213241744-YTL_The_Growth_Story

Food for thoughts over lunch

@Jonathan Keung, can you please share anything interesting in YTL management replies to queries during the AGM?

As @observatoty rightly pointed out, Wessex's RAB of 4.1bn pounds is funded by debt and equity. Currently the 3 listed water companies in the UK are trading at low valuation of 1.1x to 1.2x RAB. Hence it is reasonable for Hong Leong research to value Wessex at 1.2x RAB now.

Please note that water companies were trading at much higher valuation of 1.5x to 1.7x RAB few years back before COVID and before the high inflation / interest rates in the UK.

If we take the current 1.2x RAB, Wessex is valued at 1.2 x 4.1bn - debt 2.4b = 2.5bn pounds or RM14.6bn

I have suggested for Wessex to consider an IPO after 2.25 when inflation in the UK subsides and valuation may go up to 1.6x RAB. Then Wessex may be able to get a valuation of
1.6 x 4.5b - 2.7b (debt) = 4.5b pounds or RM26.1 billion

Just think about it, come 2030 when Wessex' capex plans get materialised, its RAB will expand to 8.0 billion pounds, and debts will increase to 2.4+2.7 = 5.1b. So at 1.6x RAB, Wessex equity value will expand to 1.6 x 8.0b - 5.1b = 7.7 billion pounds or RM44.7 billion

As for Wessex RAB expansion, it really depends on how much capex is approved by Ofwat and how much the company spends. And how much capex it spends depends on inflation in the UK to some extent.

FYI, Wessex has just submitted to Ofwat a capex plan of 3.5 billion pounds for the next regulatory period from April 2025- Mar 2030. Normally Ofwat will push back on water companies' capex programmes in order to lower the water tariffs, but in this round, Ofwat seems to be supportive of the water companies' capex plans as it faces criticism on sewerage overflow and flooding issues in recent months.

If this capex plan gets approved, Wessex will expand its RAB from currently 4.1 billion pounds to about 4.5 billion pounds by Mar 2025 then expand by another 3.5 billion to almost 8.0 billion pounds by Mar 2030.

Then assuming the WACC approved for water tariff determination remains the same, we shall see Wessex revenue and earnings base doubling up by 2030.