Posted by dragon328 > 2024-07-23 14:58 | Report Abuse

it is heavily biased to certain parties

Posted by MrFox > 2024-07-23 15:00 |

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Posted by dmyap327 > 2024-07-23 15:02 | Report Abuse

@DRAGON328 WELL DONE

Posted by sayyouloveme > 2024-07-23 15:06 | Report Abuse

@dragon328 your fact well said. :)

Posted by raymondroy > 2024-07-23 15:13 | Report Abuse

im with u.... MrFox dragon328 OTB.... keep up the good spirits :-) cheers

Posted by MrFox > 2024-07-23 15:15 |

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Posted by paktua73 > 2024-07-23 15:18 |

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Posted by paktua73 > 2024-07-23 15:25 |

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Posted by dragon328 > 2024-07-23 15:33 | Report Abuse

I need to write something not so good on YTL Power, so that my posts will be seen as more balanced, also to give a more impartial view on the company prospects.

Due to the weak second draft determination by Ofwat, especially the WACC currently set at 3.71% (improved from 2.9% in 1st determination but still much lower than 4.3% as Wessex applied for), Wessex's earnings will take a beating from 2025-2030 with net profit reduction of RM150 million in FY2025 up to RM240 million reduction in FY2030 to YTL Power, if the final determination in Dec 2024 still sets it at 3.71%.

If this is indeed the case, I will look to reduce my earnings projection (EPS) of YTL Power to the following:

FY2024 - still 39 sen
FY2025 - 44 sen, down from 46 sen
FY2026 - 57 sen, down from 60 sen
FY2027 - 63 sen, down from 66 sen
FY2028 - 76 sen, down from 80 sen
FY2029 - 83 sen, down from 87 sen
FY2030 - 85 sen, down from 89 sen

Posted by sultan > 2024-07-23 16:03 | Report Abuse

The Report Abuse link has disappeared in this forum. Interesting.

Posted by sultan > 2024-07-23 16:07 | Report Abuse

The Report Abuse link of this forum appears when the user Sign Out and visiting here as guest. Meaning the administrator of this forum limits certain users to access the Report Abuse link.

Posted by paktua73 > 2024-07-23 16:17 |

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Posted by ks55 > 2024-07-23 16:51 |

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Posted by ks55 > 2024-07-23 16:53 |

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Posted by musangfoxking > 2024-07-23 18:32 |

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Posted by MrFox > 2024-07-23 18:45 | Report Abuse

good closing

Posted by KLV868 > 2024-07-23 18:47 | Report Abuse

August could be a good month for YTL's believers.

Posted by Bernard85 > 2024-07-23 21:40 | Report Abuse

On the way to break RM5 again. Gogo, YTL Power

Posted by MrFox > 2024-07-23 22:29 | Report Abuse

PE only 11, so low...means
upside more than downside!

Posted by cktay > 2024-07-24 00:09 | Report Abuse

Hi Dragon, taking into account of the current stance by Ofwat, don’t you think that it is better off for Wessex to be disposed/monetarized (after investing in it for 20 years) and the money better spent on say developing the water industry in Johore/Malaysia (nearer home)?
Also the worst may be over for the ringgit and if it is pivoting, isn’t it the best time now to bring the money home?
I also worry about geopolitics in the western world where they can suddenly nationalize your assets.
What is your estimate of how much Wessex is worth, net, after all the loans are paid off?

Posted by slts > 2024-07-24 06:22 | Report Abuse

buying a loss making co. NSL. already gearing super high.

Posted by dragon328 > 2024-07-24 08:56 | Report Abuse

@cktay, I have indeed suggested to YTL Power management to consider a listing of Wessex Waters in the UK, while I do not think they will dispose off Wessex entirely.

Wessex is a prized asset with a perpetual license to serve some 3 million customers in Bath, UK. The regulated asset model of the water industry in the UK is suffering from a temporary setback due to extraordinary high inflation and high interest rate environment in past 3 years due to Covid pandemic and Ukraine-Russia conflicts.

If we look past this temporary setback in past 3 years, the business and water assets have great long term potential for decades to come, with regulated asset base to double up every 8 to 10 years, eg. from GBP3.5b in 2022 to GBP7.0b by 2030. Just imagine, its regulated asset value may double again further to GBP14b by 2040 and GBP28b by 2050. Then if we value Wessex even at 1.1x RCV, it would be worth over GBP30b or RM180 billion, minus out 67% debts, the equity value would be close to GBP10b or RM60 billion then.

As a long term investor, YTL Power typically will not part with a prized asset easily, especially if the company is not in need of cash.

Posted by solid > 2024-07-24 09:33 | Report Abuse

https://theedgemalaysia.com/node/719989

Posted by Jesse1314 > 2024-07-24 10:08 | Report Abuse

I do not think Wessex should be disposed off given that it is utility in nature. I believe the current state is Ofwat disciplining the water companies.

If I try to the regulator's shoes, I will ask:
How many years have the shareholders been extracting dividends from the water companies?

If I understand from the business model correctly, the water companies are increasing their gearing so that shareholders can be paid. Now the regulator is asking them to reinvest their dividends instead of taking money out...

Posted by DevOpsEngineer > 2024-07-24 10:10 | Report Abuse

Please take note that ytlpower will announce reduced profits next qr.
If you believe in AI and data center then buy at your own risk as over supply, price war is the biggest risk now .. Alibaba cloud biz is a good example of price war to attract customer... Alibaba and tentcent cloud reduce 95% of price

Posted by sg999 > 2024-07-24 10:27 | Report Abuse

@DevopsEngineer, yes, if you check on USEP, chop almost half compared to last year Apl-Jun.

Posted by paktua73 > 2024-07-24 10:51 |

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Posted by paktua73 > 2024-07-24 10:57 |

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Posted by dragon328 > 2024-07-24 11:07 | Report Abuse

@Jesse1314, I tend to agree with what you said above. Ofwat is seen or must be seen as a regulator to protect consumers' right and to ensure water companies deliver excellent services to the consumers.

No doubt, water companies in the UK have been reaping rewards year after year up until Covid-19 pandemic, YTL Power had been getting good dividends from Wessex for many years since its take-over in 2002, something like GBP60-80 million every year from 2002 to 2020 totalling over GBP1.2 billion, way more than the equity money invested in the 2002 take-over.

It is time for UK water companies to reinvest the capital to improve water assets and deliver better services to water consumers. The good thing is that every pound spent on capital expenditure will be added to the Regulated Capital Value (RCV) and will be renumerated back to water companies in the future through increased water tariffs.

Posted by dragon328 > 2024-07-24 11:12 | Report Abuse

@DevOpsEngineer, I beg to differ on your opinion above.

I think YTL Power will report slightly better profits in upcoming Q4 FY2024, compared to Q3 FY2024.

Yes Singapore USEP was depressed since early June to mid July, and hence it affected any long generation into the pool by PowerSeraya, and indirectly also affected certain retails contracts that are linked to the wholesale pool market. But based on the secured retails contracts that make up over 80% of PowerSeraya's revenue, PS should be able to report similar level or slightly better earnings in Q4 compared to Q3 FY2024.

We cannot compare this Q4 FY2024 result with last year Q4 FY2023 which was boosted by two extraordinary items: 1) commissioning profits for Jordan Power after it achieved commercial operations for its second unit in Mar 2023; 2) extra long generation profits of estimated SGD30m for PowerSeraya due to spiking pool prices then.

Posted by dragon328 > 2024-07-24 11:17 | Report Abuse

On its AI data centre division, I estimate YTL Power has at least secured some 180MW of AI data centre jobs from Nvidia and big clouds, which will keep it busy until 2025.

It may be true that big clouds like AWS and Tencent have slashed prices for their cloud computing services substantially in recent weeks, but we cannot judge from this that the AI boom is over. It is too early to tell. There may be various reasons for these 2 big clouds to slash prices for their cloud services, such as roll over of AI chips to more powerful GPUs / monetising all the old chips, grabbing market shares for the current financial year etc. I will not speculate on that. We can get more clues when Nvidia announces its quarterly results in August 2024 and any guidance it will provide then for 2025.

Posted by paktua73 > 2024-07-24 11:49 |

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Posted by Mikecyc > 2024-07-24 12:04 |

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Posted by paktua73 > 2024-07-24 12:37 |

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Posted by paktua73 > 2024-07-24 12:52 |

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Posted by paktua73 > 2024-07-24 12:53 |

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Posted by paktua73 > 2024-07-24 12:56 |

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Posted by 5354_ > 2024-07-24 13:54 | Report Abuse

Followers even a lot but share like YTL Power down they happy?

Posted by Mikecyc > 2024-07-24 14:23 |

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Posted by paktua73 > 2024-07-24 14:30 |

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Posted by dragon328 > 2024-07-24 14:34 | Report Abuse

According to latest data, foreign funds net bought a total of RM12 million worth of YTL shares and RM10 million worth of YTL Power shares yesterday. Local funds also net bought a total of RM15 million worth of YTL Power shares yesterday, hence the rally in share price yesterday.

The past few days of data shows that foreign funds are mixed / divided in YTL and YTL Power, some are taking profits, others are buying. Or some funds take profit on price strength and buy back on price weakness.

As YTL Power is very cheap at 11x PER for a large utility and AI play, despite the 7x increase in share price in one year, it makes the decision to buy or to take profit on YTL Power rather difficult to fund managers. Hence I do not expect foreign funds selling on YTL and YTL Power to be significant in next few months, after trimming more than half of their holdings in May and June 2024.

Posted by dragon328 > 2024-07-24 15:06 | Report Abuse

Dear paktua73, thank you so much for your effort to promote my blog and to get so many new followers, but I see that many of my posts now in YTL and YTL Power forum get to stay and have not been removed since yesterday, and I don't aim to be having the most followers in i3.

But I will keep fighting the naysayers who got my posts removed, by continuously posting impartial comments on the stocks I cover. Only if my posts get removed again, then fellow investors may pm me for any info you require.

Thank you

Posted by Aero1 > 2024-07-24 15:15 | Report Abuse

https://theedgemalaysia.com/node/720085
YTL Cement to acquire 81% stake in Singapore firm for RM792 mil for IBS expansion

this company has a track record for constructing 76 units of data centers.
https://www.easternpretech.com.my/track-records/

Posted by paktua73 > 2024-07-24 15:17 |

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Posted by dragon328 > 2024-07-24 15:34 | Report Abuse

Again I need to write something not so good about YTL Power's upcoming results.

Some fellow investors pm to express concerns on the upcoming Q4 FY2024 result of YTL Power and fear of a big selldown if the Q4 FY24 result is a lot lower than last year Q4 FY2023.

I did have a quick check on the ground in Singapore and found out that certain type of retails electricity contracts were getting affected by the prevailing low USEP, such retails contracts have electricity contract price linked to the average USEP of the month.

Though most of PowerSeraya's revenue is tied to longer term retails contracts (>80%) and vesting contracts (now <10%), the loss of long generation profit as seen in last Q4 FY2023 (April-June 2023) (estimated to be about SGD30 million) will be badly missed, especially when retails contract margin is getting affected by low USEP.

The RM1.06 billion of pretax profit achieved by PowerSeraya in Q4 FY2023 was exceptional in conjunction with super high pool & USEP prices then. PBT of RM1.06b or SGD305 million translated into net profit of SGD253 million. Minus out the estimated SGD30m of long generation profit which will not recur, PowerSeraya achieved core net profit of SGD220m in Q3 FY2023.

Due to softer retails contract margin, I would knock off 10%-15% of PowerSeraya's core net profit of SGD223m, and derive a projected net profit range of SGD185m to 200m each quarter for Q4 FY2024 and possibly Q1 FY2025 as USEP has remained depressed till mid July 2024.

Posted by dragon328 > 2024-07-24 15:39 | Report Abuse

Anyway in my last projections for YTLP in late May 2024, I did forecast net profit of SGD750 million for PowerSeraya in FY2025, translating to SGD187.5 million average each quarter, which will still fall within the above range of SGD185-200 million.

Going into FY2026, retails margin is expected to face further downwards pressure as Sembcorp and Keppel new units are expected to come online in 2026. Hence I projected for PowerSeraya net profit to gradually drop to SGD600 million by FY2027.

Posted by dragon328 > 2024-07-24 15:45 | Report Abuse

So PowerSeraya will contribute net profit of RM700m max to YTL Power in Q4 FY2024. Jordan and Jawa Power are expected to contribute some RM100-120 million net profit every quarter, and Wessex is expected to at best break even. The contribution from 1st phase data centre with SEA Ltd is expected to be insignificant as only 8MW has been commisssioned since Mar 2024.

The wild card is Yes 5G business, which I hope will register smaller losses.

All in, it looks like we are looking at total net profit of RM750m to RM820 million for YTLP in Q4 FY2024, which will be a drop of almost 30% from last year record profit of RM1.1b, but will be 7%-15% higher than Q3 FY2024.

Will YTLP share price see a knee-jerk reaction of selling after posting Q4 FY2024 result? Maybe or maybe not. But I won't be bothered as I am a long term investor who aims to ride on this winning stock until its next big earnings driver of AI data centre comes into play in FY2025.

Posted by Mikecyc > 2024-07-24 15:49 |

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Posted by OTB > 2024-07-24 15:50 | Report Abuse

@Dragon328,
From AMinvest report.
Quote !!
We believe that YTLP’s 100 MW AI DC (data centre) in Johor is on track for commissioning in 2025F. We maintain our earnings forecast of more than RM1bil for the AI DC in FY26F.
Unquote !!

This increase in profit from the partnership of Nvidia is more than enough to compensate for the loss of profit from PowerSeraya.
Thank you.

Posted by Mikecyc > 2024-07-24 16:00 |

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