• YTL Power International (YTLP) will be joining forces with Nvidia Corp to build an artificial intelligence (AI) infrastructure that is expected to bring fast supercomputers to Malaysia by mid-2024F.

• YTLP said that the AI infrastructure will provide the foundation for scientific research and the development of solutions & applications for customers.

• We view this positively as YTLP would be at the forefront of AI technology and, hence, the first to provide solutions and applications to customers looking to venture into AI.

• In addition, as the AI infrastructure would be residing at the YTLP's data centre, this would be a selling point to attract more clients to the data centre.

• We do not know the amount of capex that YTLP is investing in the venture. Also, we do not expect earnings contribution from the AI venture to come in immediately as it would take time to commercialise the operations. The 1st phase of YTLP's data centre, which is 8MW, will be coming on-stream in 1H2024.

• We maintain BUY on YTLP with SOP-based fair value of RM2.70/share. This implies a FY24F PE of 9x. YTLP is currently trading at a FY24F PE of 8x, which is below its 2-year average of 13x.

Source: AmInvest Research - 11 Dec 2023