Posted by dragon328 > 2023-06-26 17:26 | Report Abuse

@super911, YTLPower earnings drop since 2017 was due to:
1) fallout of earnings from Malaysia power plants after its PPA expired
2) PowerSeraya was making losses or minimal profit in 2017-2019 due to over-supply situation in Singapore and Gencos' over-contracting of LNG supply
3) start-up losses in Jordan Power
4) losses in Yes 4G-5G startup

Posted by moncmondo87 > 2023-06-27 08:44 | Report Abuse

Some interesting trading data in SG last week - numerous half-hourly USEP spikes within periods 32-46 over 4 days (Weds, Fri, Sat and Sun) with many capped at $4,500/MWh.. Even more interesting - some demand during these spikes met by GT(s); and guess who's registered capacity (latest, as at 2 June 2023) includes GTs ?

Posted by shpok4574 > 2023-06-27 08:57 | Report Abuse

@Dragon328, Thank You for your info

Posted by chessgame99 > 2023-06-27 10:09 | Report Abuse

@moncmondo87 Dont be too happy with S$4500 /MWh spike. It can work both ways for the gencos. If they are not able to cover their contractal positions, then they will be losing a lot of money. Even with spare units in YTLP, running up an unit to capture such short term peaks is hard. I will prefer a higher retail margin book than gains from such short term trading pool positions. It can be a windfall or a big disaster for that month. 1 day loss can make or break the whole month P&L

Posted by chessgame99 > 2023-06-27 10:11 | Report Abuse

And to add on, if YTLP continues or does a strategy of keeping spare capacity running to cover such positions , then it loses its optimal generation "efficiency" with a hope of market opportunities in pool . But i dont know if these opportunities will always be there. So it is hard to say which is a better decision.

Posted by jeffchan1901 > 2023-06-27 11:41 | Report Abuse

I see the price drop as an opportunity to also add more should it drop below 0.80.... Knowing that it had peaked passed 1.35 twice before, I will make sure I add more when the time comes. Good things comes to those who wait I say :-)

Posted by chessgame99 > 2023-06-27 12:53 | Report Abuse

80 cents ! my goodness.. you are expecting a 30-40 percent price drop ?

Posted by hng33 > 2023-06-27 13:55 | Report Abuse

30-40% price drop? Q1 Power seraya record RM 800m profit, what will coming Q2 Power seraya profit? Just look at the factual figure now on average Wholesale Electricity Prices ($/MWh), Q2 is estimate to record massive 75% increment if compared to Q1.

2023 Average Wholesale Electricity Prices ($/MWh)

1. January 219.13
2. February 222.53
3. March 337.77

4. April 324.04
5. May 488.71
6. June 539.39 ( latest 7 day average)

Posted by hng33 > 2023-06-27 14:04 | Report Abuse

But, such massive increment in wholesale electricity price only will affect 1/4 of its earning which based on spot price in wholesale market. Any surplus wholesale price higher than Q1 is extra windfall profit to YTL seraya.

Majority of YTL Power profit margin is locked ahead via retail contractual range 6 - 2 year (YTL seraya hedge 80% natural gas in accord to contract period in order to lock desire profit margin). These locked profit margin will not affect by gas fluctuation or volatile wholesale price, thus ensuring steady profit

Posted by hng33 > 2023-06-27 14:11 | Report Abuse

The wholesale price is higher now in Q2 than in Q1 despite tumbling in feedstock gas cost is because imbalance in demand supply which will be prolong till new capacity supply kick in 2026. These have resulted expansion in profit margin for YTL seraya for both retail and wholesale market onward for foreseeable next 3 year.

Posted by hng33 > 2023-06-27 14:21 | Report Abuse

Don forget YTL aside derive profit from Power seraya and enjoy high strength in Sgd currency by additional 5%, YTL also due to record V shape recovery from UK wessex water in coming Q result through 9% water traffic hike, as much as RM 100m swing from loss to profit, these swing will further exacerbate by 10% strengthen in pound sterling currency.

In additional, maiden contribution from Jordan Attarat shale power will start record profit after secure COD on 26 May 2023, another swing to profit through 45% equity account onward.

Posted by probability > 2023-06-27 14:22 | Report Abuse

wellsaid hng33..absolutely agree cost came down while asp went up and cant see the scenario changing on foreseeable future

Posted by hng33 > 2023-06-27 14:28 | Report Abuse

probability

I'm sorry for previous harsh word in hengyuan, everybody hate loss making, lets move ahead.

Posted by probability > 2023-06-27 14:33 | Report Abuse

no issues, its normal in stock market,..we need to hear the negative comments too else no chance of finding truth

Posted by hng33 > 2023-06-27 14:41 | Report Abuse

Higher Inflation Beneficial for water concession credit metrics. why ? Although higher inflation leads to higher indexation on inflation- linked debt, but inflation-driven increase in regulatory capital value is greater, leading to lower gearing.

The debt structure of WWSL comprises about 54% fixed-rate debt, 14% floating-rate debt and the remainder IL debt. Further, improvement in EBITDA has more than offset the increase in interest on floating-rate debt, supporting an improvement in cash PMICRs

Posted by hng33 > 2023-06-27 14:47 | Report Abuse

Why higher inflation has helped in improving wessex gearing ratio? These is becasue wessex water has a simple capital structure with no swaps and a high proportion of fixed-rate debt.

Further, Wessex has demonstrated strong operational performance in total expenditure (totex) and net outcome delivery incentives (ODI) rewards for AMP7 ( 5 year price control period ending March 2025)

Posted by hng33 > 2023-06-27 14:49 | Report Abuse

Wessex is expect to deliver totex outperformance of 7% during AMP7, with 3% outperformance on operating expenditure (opex) and 12% on capex. Outperformance in opex leads to cost savings and improves EBITDA.

Posted by hng33 > 2023-06-27 14:55 | Report Abuse

As highlight in YTL Quarterly report, aside benefit of inflation on its financial metric, A higher interest-rate environment also has supported a reduction in pension liabilities. If high inflation persist, pension deficit will turn into surplus at the end of AMP7.

Posted by hng33 > 2023-06-28 09:51 | Report Abuse

Technically, YTLP likely to challenge earlier high RM 1.35 soon

Posted by hng33 > 2023-06-28 10:07 | Report Abuse

These 2 day is mid year closing, which is time period for institutional fund manager to actively readjust their stock portfolio. For YTL and YTLP, window dressing may happening now to challenger previous high level

Posted by hng33 > 2023-06-28 11:16 | Report Abuse

RM 1.30 is immediate target, convincedly breakout will heading to next level RM 1.35

Posted by observatory > 2023-06-28 13:32 | Report Abuse

Extracted from CIMB report on YTL
" it could unlock value over the next few years by paring down stakes in assets such as Power Seraya and Wessex Water via a possible listing as investors continue to discount its RM72bn asset base (as at FY22)."

This is the suggestion by dragon328!
Are you their banker !!?

Posted by dragon328 > 2023-06-28 15:09 | Report Abuse

haha observatory, they have got world class bankers on their side. I was just suggesting some sensible things to do for YTL, am glad that they have listened.

Posted by dragon328 > 2023-06-28 15:24 | Report Abuse

Just checked again on valuation of the 3 water companies listed in the UK, United Utilities, Svern Trent and Pennon. Last May when I first calculated, these 3 water companies were trading at PER of 20x to 36x and at 1.27x, 1.42x and 1.488x RCV respectively.

The share price of United Utilities has been hovering around similar level since, while Svern Trent has come down by 10% and Pennon down 20%. This makes their valuation closer at 1.2x to 1.27x RCV.

Now assuming same valuation of 1.2x RCV, Wessex is potentially worth an enterprise value of 3.68 billion pounds (RCV) x 1.2x = 4.416 billion pounds. Minus off net debt of 2.315 billion pounds, the equity value will be about 2.1 billion pounds or RM12.5 billion or RM1.54 per YTLPower share.

Now the valuation of water companies in the UK has come down slightly due to higher interest rates (now 5.0% vs 2.1% last year), but pounds sterling has appreciated some 13.6% against ringgit in past few months to 5.94 now, partially offseting the lower RCV multiple.

At 1.3x RCV, Wessex is worth 2.47 billion pounds or RM14.7 billion or RM1.81 per YTLPower share.

At 1.5x RCV, Wessex is potentially worth 3.2 billion pounds or RM19.0 billion or RM2.35 per YTLPower share.

Posted by dragon328 > 2023-06-28 15:27 | Report Abuse

I reckon that YTL Power should consider listing of Wessex if it can get a valuation of minimum 1.3x RCV.

Otherwise, I would rather wait for another 2 years when UK interest rates will come down and Wessex RCV will increase to 3.89 billion pounds in 2025. Then it may get a valuation of 1.5x RCV or 3.5 billion pounds or RM20.8 billion or RM2.57 per YTLPower share.

Posted by dragon328 > 2023-06-28 15:38 | Report Abuse

https://klse.i3investor.com/web/blog/detail/dragon328/2022-04-22-story-h1621549755-YTL_Power_is_potentially_a_10x_Bagger

Pls refer to the article again for calculation of Wessex valuation and PowerSeraya should YTLP decide to list up either of them

Posted by dragon328 > 2023-06-28 15:44 | Report Abuse

It would be an opportune time for YTLP to list up PowerSeraya in next 2-3 years as earnings are expected to remain strong.

At Mar 2023 quarter earnings of S$230 million pretax profit, annualised to S$920m PBT or S$763m net profit, PowerSeraya may potentially be worth S$763m x 14.3x = S$10.9 billion. I am taking the average PER of Sembcorp and Keppel which are currently trading at PER of 14.1x to 14.5x.

Hence, PowerSeraya may be worth RM37.7 billion at current exchange rate of S$1.00 = RM3.46. That would be fantastic valuation of RM4.67 per YTLP share.

Wessex + PowerSeraya will give a valuation of almost RM2.35+RM4.67 = RM7.00 per share to YTLPower. Sounds crazy huh?

Let's see.

Posted by hng33 > 2023-06-28 15:51 | Report Abuse

YTL to pay 9.5sen dividend, how much YTLP will pay ?

https://themalaysianreserve.com/2023/06/28/ytl-corp-targets-rm1b-dividend-payout-open-to-strategic-acquisitions/

Posted by dragon328 > 2023-06-28 15:54 | Report Abuse

PowerSeraya cashflows will be higher at S$763m + S$75m (depreciation charges) = S$838 million.

At 7% cashflow yield, PowerSeraya is valued at S$838m/7% = S$11.97 billion.
For a dividend payout of 70%, dividend payouts may be S$587 million a year, at 5% dividend yield (which is very attractive in Singapore) will value PowerSeraya at S$587m/5% = S$11.73 billion.

Whichever way you value it, PowerSeraya is easily worth over S$10.9 billion or RM37.7 billion, if it gets listed in next 3 years.

Posted by dragon328 > 2023-06-28 15:57 | Report Abuse

For YTL to pay RM1 billion dividend, it will need to get some RM600m dividends from YTLPower and RM300m from MCement. So YTLPower will need to pay out RM1.2 billion worth of dividends or 15 sen per share.

As calculated before, YTLPower operating cashflows will be strong at over RM3.0 billion a year for next 3 years, so easily supporting a 40% payout or RM1.2 billion a year.

Posted by hng33 > 2023-06-28 15:57 | Report Abuse

At the meeting, YTL team was also reported to have said that core assets, such as Malayan Cement Bhd, including the Vietnam venture, core land bank in Sentul of 165 acres, Power Seraya and Wessex Water are not for sale....but, may unlock through IPO

Posted by hng33 > 2023-06-28 15:59 | Report Abuse

dragon328
Both YTL and YTLP have dividend yield more than 10% now

Posted by hng33 > 2023-06-28 16:01 | Report Abuse

YTL aside derive dividend from YTLP and upcoming Mcement, it also received steady dividend from 2 listed REITS

Posted by hng33 > 2023-06-28 16:02 | Report Abuse

YTL dividend 9.5sen is conservative target as it need to reserve cash in preparation to bid HSR, which is entirely private funded in exchange for long term concession

Posted by cheeseburger > 2023-06-28 16:54 | Report Abuse

macd has suggest a uptrend is forming coming fwd.

Posted by dragon328 > 2023-06-28 17:15 | Report Abuse

Correct, YTL will need to preserve some cash to do MRT3 and HSR if it wins them. YTL can declare dividends received from Mcement and YTLP as dividends totalling RM1.0 billion, then reserve the dividends from 2 REITs and construction division for future projects. Potentially YTL could monetise some more peripheral assets if necessary, it just sold a piece of land in Perak for RM70 million.

Posted by Invest_888 > 2023-06-28 17:32 | Report Abuse

Those sold YTLP at RM1.16, missed this rebound.

Posted by observatory > 2023-06-29 12:53 | Report Abuse

Thames Water faces financial trouble.
https://www.reuters.com/world/uk/uk-working-contingency-plan-indebted-thames-water-sky-news-2023-06-28/

Among the water companies, Wessex is one of the best, if not the best, in terms of operating performance. It scored the highest customer satisfaction in 2021-22
https://www.ofwat.gov.uk/wp-content/uploads/2022/12/WCPR_2021-22.pdf

Posted by Catzai124 > 2023-06-29 13:44 | Report Abuse

So 10% dividend yield will drive the share price to at least RM3 in near future

Posted by xiaochen > 2023-06-29 16:53 | Report Abuse

Public anger has been further stoked by the payment of dividends to investors and large salaries and bonuses to water industry executives.
由于目前英国百姓的口袋非常压迫，所以对于公共机构的收费非常敏感。收费要拿捏得好，是一项大挑战。

Posted by xiaochen > 2023-06-29 16:55 | Report Abuse

Most companies are asking the regulator to approve real-terms price increases of an average of 25% between 2025 and 2030, it reported. Thames Water is reportedly proposing rises of 20%, while Wessex Water wants to put up its prices by 30%.
https://www.theguardian.com/environment/2023/jun/28/water-firms-push-for-bills-in-england-to-rise-by-up-to-40-per-cent-say-reports-sewage-climate
Wessex Water千万要小心小心。

Posted by xiaochen > 2023-06-29 16:56 | Report Abuse

Consumer groups said at the time that the increase of 8p a day could be a “tipping point” for the one in five customers who were already struggling to pay.
生活越来越不容易。

Posted by cgtan2020 > 2023-06-29 17:52 | Report Abuse

For those who want to read the CGS-CIMB recent key-takeaways from non-deal roadshow in SG with 10 investors in SG. Here is the link to the report, https://rfs.cgs-cimb.com/api/download?file=12adfc5f-a430-4fcc-98ba-e561ef0da8a9

Posted by cgtan2020 > 2023-06-29 17:53 | Report Abuse

new TP for YTLP for those technical trader. https://rfs.cgs-cimb.com/api/download?file=b2cefa5a-3346-4c47-b44e-70657a3ad8a0

Posted by dragon328 > 2023-06-29 23:37 | Report Abuse

Thames Water is an isolated case where the holding company holds too much debt of 14 billion pounds until it has problem servicing it. Wessex Waters does not have any debt at the holding company level, all its debts sit at the operating company level and ring-fenced. Wessex gearing ratio is comfortable and has no issue of servicing its debts from operating cashflows.

Posted by dragon328 > 2023-06-29 23:40 | Report Abuse

@xiaochen, the water bill in the UK is just about 10% to 15% of the total household utilities bill, just like here. We pay about RM15-20 for our water bill every month while paying RM150-300 for electricity bills. There in the UK, water bill may be just around 10-15 pounds a month but household gas and electricity bills may run into 200-500 pounds a month. So the issue of water tariff increase is never a big issue compared to gas and electricity rates.

Posted by xiaochen > 2023-06-30 08:54 | Report Abuse

@dragon328, noted.
Since the water bill is low, so, even if the cost increase 30%, it will not become a serious issue if compare to electric bill.

Posted by shpok4574 > 2023-06-30 09:48 | Report Abuse

@Xiaochen, increase 30% may become 暴利税, so need some further discussion in Parliment

Posted by cheeseburger > 2023-06-30 10:38 | Report Abuse

end of the day, it is who is managing the company.

Posted by xiaochen > 2023-06-30 14:43 | Report Abuse

@shpok4574 去年我国的暴利税，真是让人无语，希望新政府对经商友好一点。