We reiterate BUY on YTL Power International (YTLP) with an unchanged SOP-based fair value ofRM6.25/share, which implies a FY25F PE of 15.6x. We ascribe a neutral 3- star ESG rating to YTLP.
YTLP has declared a final gross dividend of 4 sen for 4QFY24, which brings total gross DPS to 7 sen for FY24 (FY23: 6 sen). The gross DPS of 7 sen implies a yield of 1.9% for FY24.
Excluding fair value gains of RM202mil on investments in Ranhill Utilities, YTLP’s FY24 core net profit of RM3.3bil was within our forecast and consensus estimates.
YTLP recorded a decent 4QFY24 core net profit of RM870mil (+25% QoQ). Although pre-tax profit of YTLP Seraya declined by 6.8% QoQ to RM785.2mil in 4QFY24, Wessex Water and the mobile broadband division swung into profitability.
Wessex Water benefited from a 12% hike in tariff and lower interest and depreciation expenses in 4QFY24. Wessex Water recorded a pre-tax profit of RM69mil in 4QFY24 vs. a loss of RM51.2mil in 3QFY24.
The mobile broadband unit secured a RM947mil contract to lay a fibre network in Sabah over 3 years. The division registered a pre-tax profit of RM37.5mil in 4QFY24 compared to a loss of RM123.1mil in 3QFY24.
YTLP Seraya’s pre-tax profit shrank by 6.8% QoQ to RM785.2mil in 4QFY24, dragged by lower sales volume, bonus and ESOS expenses. The bonus and ESOS expenses amounted to RM60mil. Excluding these, YTLP Seraya’s pre-tax earnings would have been flat at RM845.2mil in 4QFY24. Going forward, we believe that YTLP Seraya’s earnings would pick up as tariffs in Singapore have risen.
YTLP is currently trading at a FY25F PE of 9.6x, which is below its 2-year average of 13x. We believe that the group deserves to trade at a premium as its long-term earnings growth is expected to be positive driven by the AI data centre.
Be the first to like this. Showing 0 of 0 comments
Post a Comment
People who like this
Featured Posts
MQ Trader
Introducing MY's First IPO Fund for Sophisticated Investors!
MQ Chat
New Update. Discover investment communities that resonate with your ideas
MQ Trader
M & A Value Partners IPO Equity Fund has been launched - Targeted 13% Return p.a
Latest Videos
0:17
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 297 views | 7 h ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....