Posted by dragon328 > 1 week ago | Report Abuse

For FY2021, Wessex registered:
revenue = 514.71 million pounds
Profit before tax = 83.33 million pounds
Corporate tax = 14.511 million pounds
Effective tax rate = 14.511/83.33 = 17.4%

As can be seen above, Wessex already recorded corporate tax rate lower than the statutory 19% in 2021. I am confident it will register an effective tax rate of lower than 25% for FY2024.

In any event, the effective water tariff hikes of ~15% will increase revenue by 77 million pounds a year. If operating costs remain as in FY2022 which were already elevated, then pre-tax profit will go up by the same 77 million pounds and net profit up by 58 million pounds.

Posted by dragon328 > 1 week ago | Report Abuse

If operating costs increase by another 10% in 2024, then pretax profit will go up by (77-35) = 42 million pounds and net profit by 31.5 million pounds or RM173 million in FY2024 after incorporating the higher corporate tax.

With the higher RAB now, the revenue increase will be higher than what I calculated above.

Posted by dragon328 > 1 week ago | Report Abuse

However, the current stock market is weak now pressured by external factors like the collapse of SVB and troubles in Credit Suisse. I will advise caution in trading and always advocate long term holdings of good stocks like YTLPower which will see increasing profits in next few quarters.

A good entry point looks like at RM0.80 then RM0.72.

hng33 has a better idea on when to re-enter after taking profit around RM0.875.

Posted by anthonytkh > 1 week ago | Report Abuse

Thanks dragon. But I never type “advise” in any public forum, I prefer “suggest”. But, hey, that’s me coz I consider myself as just ain’t good enough and am still learning. Good luck and all the best

Posted by dragon328 > 1 week ago | Report Abuse

ok, I will suggest caution in trading... which I am not good at

Posted by dragon328 > 1 week ago | Report Abuse

as I pointed above, if operating costs increase further by 10% in FY2024 Mar, pretax profit of Wessex will increase by (77 - 35) = 42 million pounds. The beauty of this regulated asset business is that such hikes in operating costs will be compensated by future hikes in water tariffs. In this example, Wessex water tariffs will get raised further in April 2024 to compensate for the 10% rise in operating costs in FY2024, such that Wessex will get back the "lost" 35 million pounds of earnings from FY2025.

In summary, whatever increase in operating costs, interest rates or corporate tax rates, Wessex will eventually get back the "regulated" returns for the services it provides. Hence in FY2025, Wessex will get back the increase in pretax profit of 77 million pounds a year.

In its latest Dec 2022 quarter, Wessex registered a pretax profit of RM59 million, annualised to RM236 million or 43.5 million pounds.

Added with the increased 77 million pounds as calculated above, Wessex total pretax profit will get back to 120 million pounds (or RM654 million) a year soonest in FY2024 or latest in FY2025 Mar.

For info, Wessex contributed pretax profit of:
RM746 million in FY2019 June
RM608 million in FY2020 June
RM494 million in FY2021 June
RM374 million in FY2022 June

Posted by myloh123 > 1 week ago | Report Abuse

Ytlpower rebounded to 87 sen

Posted by xiaochen > 1 week ago | Report Abuse

不是吧，不是吧。九毛咯。EPF不是卖着吗？股价干嘛还高升？

Posted by dragon328 > 1 week ago | Report Abuse

UK corporate tax rate hike to 25% has been well expected, already announced back in 2021 and Wessex has already provided for the deferred tax charge increase, so it was a no issue.

EPF selling YTLP is an obvious mistake, as it turns to more like a short term trader now, EPF will lose out on the long term high dividend yields in years to come if it takes profit on the 10% share price gain.

Posted by dragon328 > 1 week ago | Report Abuse

I think EPF sold again and press it from 0.90 to 0.865

Posted by myloh123 > 1 week ago | Report Abuse

Yes, we r long in ytl power. Nowadays its hard to find a stock with pe 4, div yield 6%pa & nta 1.75 with a good biz modal and appreciation in capital.

Posted by xiaochen > 1 week ago | Report Abuse

Walau，傻眼。短短几分钟就从0.90打到0.845，假如是EPF，那也太牛了。

Posted by abc333 > 1 week ago | Report Abuse

last few week, repeat 0.835 in, 0.87 out, this week sell 0.895 , buy 0.845, hopefully will repeat few round

Posted by wallstreetrookieNEW > 1 week ago | Report Abuse

Time to collect

Posted by wallstreetrookieNEW > 1 week ago | Report Abuse

NTA RM1.75

Posted by wallstreetrookieNEW > 1 week ago | Report Abuse

Don't sell this quality stock

Posted by Ran271221 > 1 week ago | Report Abuse

Saya tak jual kerana EPS meningkat dan dividend yg lumayan.

Posted by TerrenceLim > 1 week ago | Report Abuse

Privitisation offer... RM1.35

Still 50% upside at least

Better get it before trading halt

Posted by xiaochen > 6 days ago | Report Abuse

马国的Agong讲话啦，Agong都希望马国和新加坡好好合作做生意，特别是数码经济、绿色经济以及粮食安全。
https://www.chinapress.com.my/?p=3355417

Posted by xiaochen > 6 days ago | Report Abuse

私有化，机会非常非常低，RM1.35是不可能的啦。
按照杨家的pattern，要私有化，早在5毛6毛就可以进行了。
杨家是不会等到今天八毛半才来私有化，更不会抬高价钱到RM1.35来私有化。

Posted by myloh123 > 6 days ago | Report Abuse

Yes, it's nice to dream.

Posted by kcwong98 > 5 days ago | Report Abuse

Dear Dragon or any who can assist

I have read all your 3 reports regarding YTL Power detailed analysis. Thank you for the fantastic hard work· But Brabazn land was not included in the valuation or may be i missed.

1. Are they using percentage completion method or completed method in the financial statements? I am not good enough to track on the income statement and balance sheet for development cost and land cost.
2. I also could not track the land was purchased in 2015 or 2009 (can not track in balance sheet).
Thank you so much.

Basic information:
Stated in the 2021 annual report: The first phase Brabazon residential property, comprising 302 units apportioned to 127 landed and 175 apartment units has been sold and targeted to be
completed in stages in 2024.

This 354 acres Brabazon land has a GDV of £2.5B (myr 13.67B, this is substantial) comprises approximate 3,675 homes, including studio, one, two, and three-bedroom apartments, as well as two, three, and four-bedroom houses, 62 acres of commercial space, and community facilities such as three schools, a library, a doctor's surgery, 17,000 capacity entertainment arena (3rd largest in UK) and sports facilities. (Wonder the financing for the arena is completed.)

Understand YTL Development UK, a wholly-owned subsidiary of YTL group, acquired the disused Filton airfield and the nearby Brabazon Hangars in 2015 from BAE Systems. But BAE disclosed 2009 the hangars was sold for £120 million.

Posted by wallstreetrookieNEW > 5 days ago | Report Abuse

YTLPOWR-C22 early movers

Posted by wallstreetrookieNEW > 5 days ago | Report Abuse

YTLPOWR-C23

Posted by wallstreetrookieNEW > 5 days ago | Report Abuse

YTLPOWR-C23 +14.29%

Posted by dragon328 > 5 days ago | Report Abuse

@kcwong98, I am afraid that I have no more information on the UK Brabazon land development than what you already stated above.

On paper, the GDV looks big at 2.5 billion pounds or RM13.7 billion. If we assume a gross development margin of say 15%, there will be a gross margin of RM2.0 billion to be realised over next 10 years or so.

As I understand it, property projects in the UK can be booked in only when the houses are completed and handed over to buyers, so we do not see any contribution yet from this project.

Posted by kcwong98 > 5 days ago | Report Abuse

@Dragon328
Thank you for the update and prompt response. If it is completed method as you mentioned, 2024 onward will have higher profit from property development. However, there is zero for property development cost in assets, and can not track AP for the progress payment received (liabilities) in the balance sheet.

I think there,are 2 portions of the property here, 1 for residential & commercial properties for sales; 2 Entertainment Arena and Sport facility (i think for lease).


1 Brabazon - you may trace from the launching of the recent property.

Posted by wallstreetrookieNEW > 5 days ago | Report Abuse

You guys should put 10% of capital in YTLPOWR warrants. It's literally free money

Posted by wallstreetrookieNEW > 5 days ago | Report Abuse

90% YTLPower ordinary shares, 10% YTLPOWR-C23
Perfect portfolio

Posted by wallstreetrookieNEW > 5 days ago | Report Abuse

take advantage of the low premiums. not just low premium, but 0 premium

Posted by hoplanner > 5 days ago | Report Abuse

wallstreetrookie..... I am new to structured warrant. Can briefly explain? is there an expiry date for this warrant? Conversion price is 70sen and at 20sen it is about the price of mother share ...... this isn't an attractive option to buy or as you term it free money.

Posted by wallstreetrookieNEW > 5 days ago | Report Abuse

it was literally free money two weeks ago.

Posted by hng33 > 4 days ago | Report Abuse

bought back ytlp at 86sen

Posted by hng33 > 4 days ago | Report Abuse

Accumulated back all ytlp at 86sen

Posted by Muyutin > 4 days ago | Report Abuse

sold at 87-87.5sen ahead of 15 Mar UK budget announcement on corporate tax
(COLLECT BACK AT 86SEN
CAN EARN MONEY??)

Posted by ChloeTai > 3 days ago | Report Abuse

I join you all at RM0.86.

Posted by curiousq > 18 hours ago | Report Abuse

Bot a little C23, if higher than 0.85 by 31Jul, gain ..... if less than 0.70, all cap gone

Posted by xiaochen > 17 hours ago | Report Abuse

YTL Power Investments Ltd.'s application seeking capital gains tax relief from the Australian government failed to raise a proper argument for the court to consider and would stand little chance of succeeding, according to the order granting the government's request to dismiss the case.

Posted by xiaochen > 16 hours ago | Report Abuse

Malaysian Co. Loses Australian Capital Gains Tax Relief

不能看此报道的详细内容，只能看部分内容，因为需要付费才能看详细内容。

很可能是上个星期股价被拉升的原因吧。

Posted by xiaochen > 16 hours ago | Report Abuse

看来应该被课了不少的税。

Posted by dragon328 > 16 hours ago | Report Abuse

@xiaochen, was the application for capital gain tax relief related to the disposal of Electranet in Australia?

Posted by xiaochen > 10 hours ago | Report Abuse

Big possibility yes. But im not sure about it, because the news is restricted for me to read the remaining contain. That's all the info i can read. Sayang the application is failed.

Posted by Alwinb > 6 hours ago | Report Abuse

From the 3rd quarter fye 2022 cash flow, YTL Power only recognised 1.9 bil, which included 1.2 bil (i/o 2.2 bil) profit from Electranet disposal. Difference could be due to Capital Gain Tax

Posted by xiaochen > 5 hours ago | Report Abuse

Law360 (March 24, 2023, 4:29 PM EDT) -- A Malaysian company was denied tax relief on the sale of its stake in an Australian power transmission operator because its challenge was improper and unlikely to succeed, the Federal Court of Australia ruled Friday.

Posted by kcwong98 > 5 hours ago | Report Abuse

Annual Report @ 30/6/2022 page 214 disposal of Australia’s ElectraNet
Note 15
(b) Investment in associates (continued)
(i) Divestment of an associate

On 23 March 2022, YTL Power Investments Limited, an indirect wholly-owned subsidiary of the Company disposed of its 33.5% interest in ElectraNet Pty. Ltd. for a cash consideration of RM3.222 billion (AUD1.024 billion) resulting a gain on disposal of RM1.272 billion.

The disposal had the following effects to the financial position of the Group for the financial year:

RM'000
Sales consideration net of transaction costs. 2,196,575
Less: Carrying amount of loan notes (230,007)
Consideration received. 1,966,568
Less: Net assets disposed.(665,198)
Gain on disposal before reclassification of other comprehensive income items 1,301,370
Reclassification of hedging reserve (38,452)
Reclassification of currency translation reserves 9,341
Gain on disposal 1,272,259

Posted by kcwong98 > 5 hours ago | Report Abuse

Can anyone explain: Transaction costs of RM1B inclusive of provision of tax, commission, legal, advisory consultation and facilitation fees?

Posted by Alwinb > 5 hours ago | Report Abuse

My guess is CGT was imputed into the transaction. As per the circular, the profit from Electranet disposal is 2.2 Bil.

Posted by Alwinb > 5 hours ago | Report Abuse

There Federal court ruling has not material impact to YTL power bottom line else there would be announced in Bursa

Posted by hng33 > 4 hours ago | Report Abuse

Upon completion of the disposal, the group will recognise a gain of RM2.21 billion, based on the carrying value of the investment as at June 30, 2021.....
https://www.theedgemarkets.com/article/ytl-power-dispose-entire-stake-australias-electranet-rm3-bil

YTLP indicate the disposal realize net gain RM 2.2 billion, but in actual only RM 1.2 billion recorded which is due to Austrialia impose 50% capital gain tax on YTLP disposal gain last year. YTLP is seeking to waive capital gain tax due to the electranet stake is long term investment, but, unsuccessful.

If appeal granted, YTLP will able to recoup back RM 1 billion from last year transaction already

Posted by kcwong98 > 3 hours ago | Report Abuse

Can i inteprete this way:

Probably the tax is 30%. YTL Power failed to get the 50% capital gain (discount) tax relief.