Hi dragon328, Any idea why YTL still keep investing in telecommunication business? Every quarter, YTLP losing more than 100M in this segment. Where is their competitive strength vs other telco?
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.
@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.
Ytl communication is 60% own by ytlp, the other 40% own by bumi partner.
Yes continues loss partly due to discontinue 1bestarnetnet by Muhyiddin, causing big impairment in asset value.
With 5g, equal level cost structure across all telecos now, at least allow yes implement fair marketing strategy to win some market share next year onward
Lam LH YTL privatise YTL land, YTL cement and YTL e solution, although trigger delist after hit threshold 90% acceptance, but still some didn't accept offer resulted YTL haven't 100% control till now, but reach 98-99% stake with minorities left over 1-2% continues holding unlisted share now.
As offer have lapse, minorities cannot do anything now unless call up management to do private arrangements.
However, minorities still able to enjoy YTL cement, YTL land or YTL e solution if these unlisted compang declare dividend to YTL corp
Another alternative is wait if YTL corp in future decided to relist again, but chance are very slim as YTL more willing to consolidate rather than dilute its money making subsidiary
those who still keep YTLLand , just hold on n pass to your next generation, Definity worth 5-10x in the future. Remember YTL goals are to keep wealthly for more than 3 generations. :)
Pengalaman saya beli saham lebih drpd 20 tahun. Keuntungan bersih drpd saham adalah positif. YTL adalah growth stock sekarang dan EPS meningkat serta dividend.
From my point of view, having UBS as shareholder is not a good news. UBS take over Credit Suisse, and high chances UBS will liquidate all these assets that inheritage from Credit Suisse.
YTL share go went up so much since 31 Dec 2023, so when a fund manager choose to liquidate which asset, normally will choose that that already showing paper gain, instead of those that showing paper loss, coz once you dispose, the loss / gain will become realised.
If UBS acquire YTL on its own, then I am sure they won't dispose it. But now problem is UBS is the white knight that force to acquired Credit Suisse, so I think high chances they will liquidate those old investment from Credit Suisse.
Above is just my personal opinion, and FYI, I am YTL shareholder as well. I am in the position to thinking should I realized my gain or continue to hold. If this news not come out, I will continue to hold as my target is above RM1.30
@shpok4574, you think the YTL share price up from 55sen to 95sen in these few month (with huge volume) is done by retailer or local institute? Answer is No, it is done by UBS. Whatever you have enjoy or experienced in the share price for the past few months is very clear control and create by them. So now question is are they satisfy with this 70% gain, or they are looking for 200%, 300% gain.
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.
for a substantial shareholder, they are not so easy to dispose their shares into the market, investor always aware about the company announcement or news nowsaday
sold at 50% profit. i know i'll regret it as always. just like ytlpower. u guys should wait. :) Anyway what's so special about UBS being the new shareholder? "Disclosure triggered due to the legal closing of the merger between UBS Group AG and Credit Suisse Group AG and the aggregation of the relevant interest of both companies as upon closing Credit Suisse Group AG ceased to exist and UBS Group AG was the surviving entity." It's a known public info that previously HSBC NOMINEES ASING SDN BHD – CREDIT SUISSE HONG KONG LIMITED held 506,561,781 shares on record dated 22 Sep 2022. Now the merged entity triggered the 5% disclosure threshold.
a bigger American investment bank Morgan Stanley also bought Media Prima shares previously and i think still holding ... But nothing great came out from there. just for discussion sake and something to ponder.
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.
Such volume on last trade day this week. Whats your opinion for investors like us. Keep averaging up or wait for next week price range. Btw ytl is my first counter.just started investing last month but missed the earlier boat
Contrary to one siasuay slanderer-cum-contrarian indicator on this thread, I am very much still invested in YTL despite paring my 6-yr-accumulated stake at the highest prices since 2020 & taking some well-deserved & earned profit to diversify into more undervalued, more immediate dividend payers. Also putting more into Japan, where YTL is dual-listed: my Mitsubishi Estate, purchased @ ¥1,638 less than a month ago, is already decently in paper gain. Unlike YTL, THEY bought their central Tokyo land in 1896... :)
Correction. Credit Suisse (Hong Kong) first appeared as a shareholder in YTL Corp with 4.6% stakes in Annual Report 2019, which means it acquired the stakes between Sept 2018 and Sept 2019. During this period, YTL share price was trading at RM1.10-1.40, so the average purchase price of Credit Suisse (HK) should be in this range. So it will not sell its stakes at anything below RM1.10.
UBS acquired the 0.8% stake in YTL after Sept 2022 when AR 2022 did not show its name as a shareholder. I assume UBS acquired this stake in past 1 month when trading volume was high, so its average cost of purchase should be between RM0.825 to RM0.94.
Foreign funds additional investment in YTL is a testimony of their confidence in the Malaysian government led by Datuk Seri Anwar Ibrahim , besides the stellar quarter results as at 31-03-2023
Some ppl only come here & hee-ho-haa when the price has already almost doubled from 50c to 90c. A small minority like me & dragon328 were here busily shopping when it was still in the mid to high 50c range in Oct...that's what separates the true winners from the wannabes.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
super911
298 posts
Posted by super911 > 2023-06-16 11:02 | Report Abuse
Hi dragon328,
Any idea why YTL still keep investing in telecommunication business? Every quarter, YTLP losing more than 100M in this segment. Where is their competitive strength vs other telco?