Posted by Aero1 > 2 hours ago | Report Abuse
USEP hit the max SGD4,500/MWh for a period in the morning as shown by the chart below. This shows the electricity supply is very tight in Singapore, and whenever there is a spike in demand or there is a generating unit tripped off or in downtime, USEP spikes up. Such occurrence will be more often going forward as demand is getting higher due to more industrial/commercial activities and new data centres and EV charging.

https://www.nems.emcsg.com/nems-prices
The USEP data here tally with EMA

While I hope that retailers will continue dumping their shares to push the share price lower towards RM2.00 or below for me to collect more cheap tickets, but it looks like the downside is limited now as foreign funds and EPF have already come in to scoop up retailers' tickets.

I agree that the proposal should have been made in a better way with more advanced information communicated to the investment public, so that such selling on IOIPG shares in past 10 days could have been avoided.

Minority shareholders who have bought in the shares of IOIPG above RM2.30-2.50 earlier are suffering now due to a poorly communicated proposal news.

On the other hand, the 14% drop in share price from RM2.50 to now RM2.16 in past 10 days is obviously overdone, as it is just a proposal, not a deal. And especially minority shareholders can have a chance to reject the proposal, so there is no damage done to IOIPG company fundamentals.

Statistics shows that foreign funds bought in a total of RM16 million worth of IOIPG shares yesterday alone, and EPF has been buying millions more in past few days as Bursa announcements show.

Hence fund managers tend to evaluate the news in a more objective way, and I think it was mainly retailers who have sold their tickets cheap to these funds on obvious over-reacting.

Just think about it, there is no deal done yet, it is just a proposal that we have every right to reject if we find out that it is not a good project.

If we have bought in earlier at RM2.30 or higher, won't it be much cheaper now to add? as there is no change in fundamentals and outlook but the share price has got 14% cheaper.

We minority shareholders hold a combined 22% stakes in IOIPG, higher than the combined 13% stakes held by EPF and ASB. With Lee family abstained in the voting, we can make a difference in accepting or rejecting the proposal.

If you don't like the proposal, just go to the EGM to vote against it.

I am sure EPF and ASB will make the right decision to protect their own interests (combined 13% stakes) in IOIPG.

With or without this Shenton 101 project, IOIPG is grossly undervalued. IOIPG is making net profit of RM800 million a year, with IOI Central Boulevard already 50% tenanted out, the expected rental income from 50% tenancy may be over SGD100m a year, which will push IOIPG net profit to over RM1.1 billion a year or EPS of 20 sen.

At current share price of RM2.16, IOIPG is trading at prospective PER of just 10.8x. The selldown in past 10 days due to this Shenton 101 proposal is unjustified as it is merely a proposal which can be easily shot down by minority shareholders.

When IOI Central Boulevard is progressively tenanted out to over 90% (the management is already negotiating for another 20% tenancy now), then gross rental income may top SGD200 million a year, and IOIPG net profit may touch RM1.5 billion, especially when Putrajaya Mariotte Hotel and Palm Garden Hotel are already up and running after refurbishment to help pushing the hospitality division of IOIPG to new heights.

I forecast that EPS for IOIPG may reach 30 sen by 2026 and higher when Marina View Residences starts to contribute in 2027. Based on an average PER of 20x for large property counters (Eco World at 20x, Mah Sing at 17x, SP Setia at 28x), IOIPG will be worth RM6.00 by 2026.

Hence, the selldown in these few days has presented a good opportunity for investors to buy low into this property giant.

For your other concern, If IOIPG minority shareholders decide to reject the proposal, then CEO Lee will have to take it back. Then he will face the dilemma of having the conflicts of interests when he develops and markets the project in competition with IOIPG's IOI Central Boulevard and Marina View Residences, or he may choose to sell the project to another party. That's his issue to deal with then.

To us as minority shareholders of IOIPG, after we reject the deal, then our own projects there will face competition with this Shenton 101 whether it is developed under Lee's private vehicle or by another party. Singapore government's intention is clear, it is to redevelop this piece of land and earn the land premium, it wouldn't care whether the developer is Lee or IOIPG or another Singaporean developer, as long as the developer can pay the land + premium.

In short, to IOIPG, it is negative bias if we reject the deal, and it will be positive bias if we take on the project and market it together with IOI Central Boulevard and Marina View Residences in synergy and not in competition.

Why this is important, as the development plan for this Shenton 101 is not finalised yet, it can be developed into another Grade A prime office like IOI Central Boulevard or a high-end serviced apartment or condo like Marina View Residences. If this project is under IOIPG, then we can see if our IOI Central Boulevard office rental is taken up well in coming months, then we may decide to develop Shenton 101 into another Grade A office and roll it out after IOI Central Boulevard achieves over 90% rental rate next year or so. If Marina View Residences are well received when it is launched end of this year, then we may decide to develop Shenton 101 into another high end condos which will be launched earliest in 2027 (as construction may start only in end of 2025).

Then we can avoid competition and can reap the maximum benefits of launching the right products into the CBD area.

@raymondroy, I think what Lee YS did is good and transparent. He could have used IOIPG to bid for the Shenton 101 project last year in the first place, but according to the statement, the bidding schedule was tight and it was quicker to use his private vehicle to bid it first. Had it used IOIPG to bid, it would have to go through an EGM first to seek shareholders' approval as the project is big, and in that case the bid would have gone through the board and shareholders' approval as Lee family controlled 65% of IOIPG. Then it would have been worse for IOIPG minority shareholders then as the timeline was tight for any shareholders to assess the feasibility of the project and vote for the bid, and Lee was holding majority of the voting rights and would have bulldozed through it.

If the bid did not require shareholders' approval, then IOIPG's management would have gone ahead to bid for it, and should IOIPG win the bid directly, then minority shareholders again would blame the management for not getting their prior approval to participate in the bid. How would you think then? Which way is better?

To me, obviously Lee has chosen the right way which is fair for IOIPG shareholders including us. He got the project first using own money, now only he proposes to inject it into IOIPG at costs, and we now have the choice to take it or leave it. We have 4 months time to evaluate the feasibility of the project and to appoint an independent advisor to to help evaluate it. If the project turns out to be not feasible for IOIPG in the long run, then we simply reject it. Important thing to note is that it is just a proposal, not a forced deal by the CEO. The CEO and Lee family will abstain from voting on this proposal.

Now come back to the Shenton 101 project itself, I am not too familiar with the prime commercial CBD area in Singapore, but from the map this Shenton House is within walking distance from major other commercial landmarks and tourists like Marina Bay and about 350m away from IOI Central Boulevard, so itself will be a prime commercial project that can fetch good rental rates. If based on IOIPG's other project in the vicinity, Marina View Residences, the potential GDV for Shenton 101 may be over SGD2.3 billion. I have seen one analyst estimating the total project costs to be about SGD1.5 billion (land costs of SGD1.0b + construction costs SGD500m), so potential gross development profits could be around SGD800 million.

If Shenton 101 is redeveloped into another Grade A prime office tower like IOI Central Boulevard, it may be able to fetch similar rental rates of SGD11.42 psf (average Grade A office rental rate in Q1 2024). Shenton 101 can have a plot ratio of 14 times when redeveloped so gross floor area may top 500,000 sf. Assuming net floor area to be rented out is 80% or 400,000sf, then potential rental income may reach SGD55 million a year. At the current market valuation of 3%-4% rental yield, this Shenton Project could be worth SGD1.4b to SGD1.8 billion.

Today selling was apparently done by short term funds and traders who seemed disappointed with the proposal announced by IOIPG CEO, they could have expected something else better.

To me this proposal is good as it shows transparency and good vision by the CEO and management. Shenton 101 is located right in Singapore CBD where high grade commercial office and residences are still high in demand.

Some analysts are concerned with the huge capital outlay of the project which will result in higher gearing for IOIPG after acquiring this project. One estimates that IOIPG would rise from 0.75x to 0.88x after paying effectively SGD1.0 billion for the project.

I agree with Hong Leong analyst's view that IOIPG gearing will come down quickly once IOI Central Boulevard is completed and IOIPG can recognise some revaluation gain of this prime asset. The cost of holding for IOI Central Boulevard is about SGD3.38 billion and the market value will be around SGD6.0 billion, so there is potentially revaluation gain of as much as SGD2.62 billion which will increase shareholders' fund by the same amount and reduce gearing to 0.61x.

Furthermore, IOIPG's operating cashflows are very strong at over RM800 million a year based on existing assets and will increase to RM1.5 billion a year once IOI Central Boulevard is 90% tenanted out.

Not to forget is that IOIPG still has over 4,300 acres of land in Kulai Johor, part of which can be monetised to reduce gearing. Disposing just 1,000 acres of land there at the minimum recent transaction price of RM25 psf will bring in over RM1.0 billion cash to IOIPG, at the most recent transaction price of RM125-138 psf will bring in cash of over RM5.0 billion to IOIPG, and gearing will drop below 0.5x.

YTL current PER is at 17x, there is still a good upside to my first target price of RM4.00. And this PER is based on current earnings base without HSR project.

I am confident that YTL will get a slice of the HSR project, likely to be the southern portion again as awarded before. The construction contract sum for this portion will be almost RM50-60 billion. Furthermore, whoever wins the HSR project, there will be huge demand boost to cement industry of which YTL's 75%-owned MCement has a majority share.

Checks on the ground indicate that the electricity retail margin continues to be strong in Singapore as USEP is back to levels well above the vesting contract price of S$210/MWh. It is likely for USEP and retail margin to stay elevated for next 2 years as supply has been tight from unit downtime for maintenance and old generating plants trip off more often and gradually get retired.

The electricity demand will get even stronger as Singapore government announced recently to increase data centre capacity by 300MW or around 30% in the near term. That will put great pressure on the reserve margin which is already close to the minimum margin of 27%.

Based on Singapore EMA's projection, there will be more than 1,000MW of old generating capacities to be retired over the next 5 years, that is almost 20% of Singapore's existing effective capacity.

YTL PowerSeraya's LinkedIn page shows that PowerSeraya has fully decommissioned some of their old steam plants and this will make way for the new 600MW hydrogen-ready CCGT to come in by end 2027.

Selling yesterday on YTL Power was done by some local institutional funds while foreign funds and local retailers became net buyers.

Guess it is normal for certain funds and retailers to just jump in and out as the share price has rallied a lot in past few months but valuation is still very cheap at 11x PER. So some cautious and early investors may choose to lock in some profits but are not completely out of this stock as they still see upsides in coming months.

Local research houses are busy upgrading construction stocks lately, raising valuation for big construction companies to PER of 20x.

YTL Corp has a projected EPS of 20 sen for FY2024. Using the same 20x PER, YTL should be trading to RM4.00. CGS has a fair value of RM3.88 for YTL, which is not too far from my figure.

@bullrun2025, IOIPG CEO proposed for IOIPG to acquire the SHenton 101 project in Singapore from his private vehicle. The CEO Lee Yeow Seng had earlier acquired the project site in an open tender last year using his own private vehicle due to the tight bidding schedule, and also due to the large capital outlay required (so as not to burden IOIPG balance sheet last year).

To me, this is a very good move by the CEO to have bidded the project first then only propose to inject it into IOIPG. Whether this will be a good project or not, it does not matter for now. IOIPG shareholders will have sufficient time now to deliberate on the deal which will require shareholders' approval at an EGM to be held. The Lee family will abstain from voting as it is a related party transaction. I think this is very transparent and fair to minority shareholders of IOIPG. We can vote to reject the deal if the independent advisor assesses that this project will not be feasible. I am sure the next major shareholders EPF (6.7% stakes) and ASB (6.4% stakes) will vote against it if it is not a good project. Our interests are protected.

Now for the project itself, I think it is potentially a good commercial asset to be held by IOIPG in the long run. The main reason for the CEO to inject this project into IOIPG is to avoid competition of this project with IOIPG's nearby projects (IOI Central Boulevard and Marina View Residences) in the CBD. With the Shenton 101 project injected into IOIPG, the company will then be able to control the timing of launches and pricing for an orderly roll out of commercial properties there.

It is not known at this stage the GDV of this Shenton 101 project. I can do a rough estimate based on its Marina View Residences project which IOIPG acquired the land for SGD1.5 billion in 2021. This MVR project has a revised GDV of SGD3.5 billion. Now in the current proposal, IOIPG will be effectively buying over SHenton 101 project at a total land cost of SGD1.01 billion so I estimate that this Shenton 101 project may have a GDV of SGD2.3 billion.

The selling yesterday and today was apparently carried out by some foreign funds trying to lock in profits as they bought into YTL Power since early Jan from RM2.50 level up. It might be prompted by share price correction of Nvidia in past 3 days (a drop of 13%) along with other AI related stocks like Super Micron and AMD. Certain investors are concerned with the waning interests in the current AI rally, but the consensus view is for the AI boom to last for another 1.5-2.0 years.

In any event, for YTL Power, the AI data centre jobs have already been locked in and earnings are set to come in next 3-4 years for AI data centres and 7-9 years for colocation data centres (with SEA and others), so the current concern on AI boom only affects the sentiment and not the fundamentals of YTL Power.

Anyway, YTL Power's share price currently only reflects the earnings from its utility businesses (power, water and telco), i.e. net profit of RM3.2b or EPS of 40 sen is currently contributed by the utility business, nothing from the AI data centre yet.

Striping out the AI part, YTL Power is still the cheapest utility stock in Bursa with PER of just 11.5x, dropping to 10x in FY2025. Tenaga is trading at how much PER?? I have lost track after its share price rallies some 40% in past 2 months.

@ValueInvestor888, the power business of YTl Power is printing money everyday giving profit of RM3.2 billion a year (from PowerSeraya RM2.8b + Jawa/Jordan Power RM400m+).

Wessex Waters is going to turn around as soon as this coming Q4, and may turn in profit of RM150 million in FY2025 increasing to RM700 million by FY2030.

This has not included future earnings contribution from UK Brabazon property business, KL WTE plant project, colocation data centre business, AI data centre business, Yes 5G turning around and digital bank JV, and PowerSeraya's new 600MW hydrogen-ready CCGT in 2028 etc.

IOIPG is consolidating with directionless trading, as there is no news since the result announcement in May end. I have not seen foreign funds selling since they accumulated IOIPG shares in April-May 2024.

The outlook for the company is still bright, with immediate catalyst of the second batch of temporary occupancy certificate to be received for its Singapore IOI Central Boulevard in next few weeks.

UOB Kay Hian Research reported that "Assuming pre-pandemic's five-year average LNG price of US$9 per mmbtu and Genting's FLNG is able to operate at its capacity of 1.2 mtps, potential revenue accretion for Genting is as high as RM2.64bil annually (8% of our 2026-2027 revenue forecasts)."

This is not too far off from my earlier estimate of S$745m revenue a year at LNG price of S$12/mmbtu. Hence, potential earnings from this FLNG project to Genting may top S$100 million from 2026.

Posted by dragon328 > 3 days ago | Report Abuse

The second news is for a development of a floating LNG facility at Papua Indonesia with a capacity of 1.2 mtpa of LNG output.

Given that LNG contains energy of 51.7 mmbtu/ton, so this project will generate output of 1.2 mtpa x 51.7 mmbtu/ton = 62 million mmbtu of LNG a year.

Using the current spot price of S$12/mmbtu for LNG in Singapore, this project may generate revenue of S$745 million a year.

Assuming a profit margin of 10%, this project may generate profits of S$75 million a year to Genting. At 15% margin, the profit contribution may top S$100 million a year.

I presume this project may have potential synergy with the 1st news, as this LNG output may be exported to China for use in the newly acquired gas-fired power plant.

Correction. The LNG price below should be in US dollars. Singapore spot LNG prices are trading at US$10-12/mmbtu in 2024, a drop from a high of US$56/mmbtu in 2022.

So the Papua LNG project may generate profits of over US$100 million a year to Genting.

Posted by dragon328 > 0 seconds ago | Report Abuse

The second news is for a development of a floating LNG facility at Papua Indonesia with a capacity of 1.2 mtpa of LNG output.

Given that LNG contains energy of 51.7 mmbtu/ton, so this project will generate output of 1.2 mtpa x 51.7 mmbtu/ton = 62 million mmbtu of LNG a year.

Using the current spot price of S$12/mmbtu for LNG in Singapore, this project may generate revenue of S$745 million a year.

Assuming a profit margin of 10%, this project may generate profits of S$75 million a year to Genting. At 15% margin, the profit contribution may top S$100 million a year.

I presume this project may have potential synergy with the 1st news, as this LNG output may be exported to China for use in the newly acquired gas-fired power plant.

The second news is for a development of a floating LNG facility at Papua Indonesia with a capacity of 1.2 mtpa of LNG output.

Given that LNG contains energy of 51.7 mmbtu/ton, so this project will generate output of 1.2 mtpa x 51.7 mmbtu/ton = 62 million mmbtu of LNG a year.

Using the current spot price of S$12/mmbtu for LNG in Singapore, this project may generate revenue of S$745 million a year.

Assuming a profit margin of 10%, this project may generate profits of S$75 million a year to Genting. At 15% margin, the profit contribution may top S$100 million a year.

I presume this project may have potential synergy with the 1st news, as this LNG output may be exported to China for use in the newly acquired gas-fired power plant.

Genting announced 2 good deals yesterday.

The first is an investment to acquire a 49% stake in a gas-fired power plant of 2 x 745MW in China for RMB100m or RM65 million.

This power plant is expected to generate revenue of around US$350 million a year for the next 25 years.

Power projects in China typically generate single digit returns. Assuming a 7% pretax margin and 5% net profit margin, I expect this power plant to generate net profit of US$17.5 million a year. For Genting's 49% stakes, the net profit contribution may come to US$8.6 million or RM40 million a year.

Hence, Genting aims to get back return from this investment within 2-3 years.

@bullrun2025, I have been accumulating more IOIPG on weakness, but I think the technical chart looks not good, support seen at RM2.25-2.31.

Decision is yours whether to add more or when to add more.

@cwc1981, I think the cooperation model may be different for the HSR project from the earlier JB-Gemas double-track railway project which is purely a construction project.

The KL-Singapore HSR is a privately funded project where the project sponsors will be a private consortium such as YTL-China entity who will come out with the required funding to complete the construction and then recover the investment through a long term concession of operating the HSR. It will be more like the model used for the ERL project.

KL-Singapore HSR project will likely need China fundings and expertise, as Japanese consortium has pulled out of the race due to much higher costs. The case in study is Japanese's HSR project in Vietnam which has never taken off due to various reasons.

Yesterday selling on YTL Power and YTL was apparently due to the news of Singtel partnering TM in setting up data centre JV in Johor.

The first phase of 68MW data centre from the JV may come online in 2026. The JV bought a piece of land in Johor for RM98 psf, which is much higher than YTLPower's land cost of RM6 psf. The JV land is small so it is only enough for setting up data centre buildings and no solar power farm. The JV data centre will need to rely on grid import power supply from Tenaga which will be double the cost of YTL Power's own solar power supply.

Furthermore, Johor is short in water supply now due to a surge of demand from new data centres and industrial activities in the state. I doubt this TM-Singtel JV could secure sufficient water supply from Ranhill at competitive rates.

For YTL Power, it has already secured 48MW of colocation data centre and close to 200MW of AI data centres, which will keep it busy until 2025. My earlier earnings projection was based on such secured jobs.

YTL Power still holds great advantages in securing more data centre jobs:
1) YTLP owns the only water supply company Ranhill in Johor, which will ensure it will get prioritised water supply to its data centres

2) YTLP has got sufficient land at Kulai park to install up to 500MW of solar power which will reduce the power supply costs, and give green credentials to the new data centres to international clients

3) YTLP has access to Nvidia latest GPUs faster than any other company in the region including Singtel, which is the primary driver to attract big clouds customers

Yesterday selling on YTL Power was apparently due to the news of Singtel partnering TM in setting up data centre JV in Johor.

The first phase of 68MW data centre from the JV may come online in 2026. The JV bought a piece of land in Johor for RM98 psf, which is much higher than YTLPower's land cost of RM6 psf. The JV land is small so it is only enough for setting up data centre buildings and no solar power farm. The JV data centre will need to rely on grid import power supply from Tenaga which will be double the cost of YTL Power's own solar power supply.

Furthermore, Johor is short in water supply now due to a surge of demand from new data centres and industrial activities in the state. I doubt this TM-Singtel JV could secure sufficient water supply from Ranhill at competitive rates.

For YTL Power, it has already secured 48MW of colocation data centre and close to 200MW of AI data centres, which will keep it busy until 2025. My earlier earnings projection was based on such secured jobs.

YTL Power still holds great advantages in securing more data centre jobs:
1) YTLP owns the only water supply company Ranhill in Johor, which will ensure it will get prioritised water supply to its data centres

2) YTLP has got sufficient land at Kulai park to install up to 500MW of solar power which will reduce the power supply costs, and give green credentials to the new data centres to international clients

3) YTLP has access to Nvidia latest GPUs faster than any other company in the region including Singtel, which is the primary driver to attract big clouds customers

@Investorrr, yes most likely YTL will be the subcontractor to a China main contractor for the HSR project, just like the model it used to build the JB-Gemas double-track railway where YTL has got over 80% of the total construction work subcontracted from a China main contractor.

YTL has the construction expertise to build the railway and HSR station, and has ample supply of building materials like cement and concrete. YTL also has the balance sheet to take up big construction jobs. Of course the train rolling stock and signalling systems will need to be imported from China/Japan/Germany.

@cwc1981, I don't expect YTL to bid for Hong Leong's cement business, as MCement already commands a dominant market share of close to 70% of Peninsular's cement market.

Of course, if it were a cheap sale YTL would look at it, but I don't expect Hong Leong to sell cheap.

Yes @cstanmyinvest, checks on the ground indicate to me that retails margin is very good for PowerSeraya in March and April 2024.

@cwc1981, I do not have any insight into YTL's HSR proposal but just looking at the past records, I think YTL will be able to make the project feasible because of a few factors:

1) YTL has a long record of good construction work delivery always on time or ahead of schedule, hence saving a lot of costs (manpower, machine hire, interest during construction etc.)

2) YTL has strong construction expertise as several of the Yeoh siblings and sons are civil engineers by discipline, hence can come out with innovative and cost effective construction methods to reduce construction time and costs

3) YTL always comes out with innovative financing methods to fund the construction projects, often based on its strong balance sheet and good track records YTL can get lower interest rates from bank borrowings or issued bonds

4) By having the above advantages, YTL will be able to bring down the construction costs to the minimum and hence require less expensive ticket prices to break even. Furthermore, YTL is in for the long haul and with its strong balance sheet, YTL will be able to withstand small losses in initial years of operations, then recover from higher ticket prices and ridership in later years. A good example is its ERL project, YTL built it at a world-beating price, hence could offer low-priced ticket of RM35 one way between KL Sentral and KLIA. Though ERL suffered small losses in the initial years of operation, but it survived through years of operation at the same low ticket price of RM35 until the government granted an adjustment in the ticket price. Now the project is giving good profits to YTL.

5) YTL has demonstrated its ability to operate world class utility facilities at efficient way, as evidenced from the improved performance of PowerSeraya and Wessex Waters after the take-over by YTL. The way YTL invested in and has managed PowerSeraya has earned confidence from the Singapore government. Furthermore YTL has various investments in Singapore and Malaysia with many business partners and corporate associates, making it easy for YTL to cross sell HSR tickets with its other services in Singapore.

Genting Singapore will be the key earnings driver to Genting Bhd, as evidenced from the latest quarterly result. It will only get better as more tourists flock into Singapore.

It is grossly undervalued as annualised net profit of S$1.0 billion makes it valued at an undemanding forward PER of just 10.8x. EBITDA of S$369m in Q1 FY2024 exceeds earlier estimates and GS is on track to achieve EBITDA of S$1.4 billion for FY2024. At S$0.88, GS is trading at just 5.2x, almost half of its Macau peers.

I also like such a slow and steady uptrend for YTLPower to scale new highs in coming weeks heading to Q4 result announcement in Aug 2024.

It was good for the temporary pullback in late May to flush out weak holders and short term traders, and for serious investors and long term funds like EPF and foreign equity funds to buy in for long term investment.

As I suggested some 2 years ago, a US listing of Genting's American assets should be a sensible move by Genting to unlock its deep value of the various resorts and casinos in the US. Genting CEO just confirmed such interest.

Unfortunately, the US Fed is still not prepared to start lowering interest rates, with the odds of 1st cut in September 2024 reduced to 55% only from 70% one month ago. But US Fed's dot plan did indicate at least one rate cut in 2024.

I believe Genting is waiting for the right time to do the US listing, it is just a matter of time. When it pulls the trigger, it will be a major catalyst to Genting's financials and share price.

Thanks @cgtan2020 for the news link above. I extract out the relevant part as below:


Rajiv Jain, chief investment officer at global asset manager GQG Partners, owns Malaysia's YTL Power International (YTLP.Malaysia). The company stands to benefit from a host of reforms in Malaysia of its power sector as it sees a data center boom and the country tries to become a regional hub, exporting power to Singapore and other parts of southeast Asia.

At 12.6 times next year's earnings, valuations in Malaysia are still relatively attractive. "No one is paying attention to the sleepy market, " Jain says.

@limch, that's why I think YTL will get the HSR project as many other parties do not know how to make it profitable, but YTL does.

@bullrun2025, based on Hong Leong report, the sum-of-parts valuation for IOIPG is as high as RM6.00 per share. There may be upside to this SOP if its completed IOI Central Boulevard in Singapore gets revalued next year when it secures more tenants.

Hong Leong attached a 45% holding company discount and gave a target price of RM3.30 to IOIPG.

To me, such a high holding company discount should be reduced progressively when IOIPG secures more tenants for IOI Central Boulevard, especially if they manage to inject it into a new REIT in Singapore at a valuation of over S$6.0 billion.

I am looking at a 20% discount to the SOP valuation, or a fair value of RM5.00 by 2025.

IOIPG is doing net profit of RM800m a year now, and should be able to achieve a net profit of RM1.1b in 2025 when half of the tenants secured for IOI Central Boulevard starts to contribute and over RM1.37b or EPS of 25 sen by 2026.

So I attach a PER of 20x to 2026 EPS of 25 sen to get a fair value of RM5.00.

Crescendo announced to sell another piece of land in Pulai at about RM130 psf to a data centre developer. Hot, hot, it is getting hotter on Johor land.

IOIPG had under-estimated the huge potential of the Johor land earlier this year when it disposed off some 400 over acres of its land in Pulai to Eco World at just RM12 psf.

Eco World has since re-sold part of this land to a data centre developer at RM75 psf, making a cool gain of 600% in just 6 months.

I believe IOIPG should have noticed the huge potential of the land in Pulai, and may choose to dispose of part of the remaining 5,000+ acres of land in smaller parcels at prices near RM100 psf, given that Crescendo has disposed off 5 small parcels of land there in past few months at an average price of RM120 psf.

Progressive sale of parcels of land up to half of its landbank in Pulai, or 2,500 acres at average price of say RM100 psf would net a cool RM10.9 billion to IOIPG, or add a value of almost RM2.00 per share to IOIPG.

UEMS just announced to dispose of some land in Iskandar at RM115 psf. Johor land is so hot now. Big landbank owners such as IOIPG are sitting on gold mine, may be slowly digging out (disposing of) some for cash in the ongoing gold rush (data centre craze).

@cgtan2020, it is just a small amount of shares changed hands between the Yeoh siblings, I won't read too much into it.

Property companies which have landbank in Johor are seeing their shares being chased up today, after Eco World announced yesterday to dispose of some 124 acres of land in Pulai to Microsoft Payments for RM405m or RM75 psf.

Along with the recent disposal of another piece of land in Pulai by AME at RM138 psf, very obviously the land prices in JB around Pulai-Kulai area have appreciated by 200% to 300% in the past few months. This serves as a good reference for property companies to revalue their landbank assets in Johor.

IOIPG has about 5,488 acreas of land in Pulai, if revalued to latest transaction price of RM75 psf, it is worth some RM18 billion, and if revalued to the earlier transaction price of RM138 psf, it is worth RM33 billion. The holding cost of this land is very low for IOIPG, so any revaluation will give rise to substantial gain of RM17-32 billion or up to RM6.00 per share.

I think IOIPG may not need all of such large landbank in Pulai for property development, and may choose to dispose of part of it when the price is right. It may choose to dispose of say 300-500 acres every year and get back cash of RM1.3b to RM2.2 billion a year for the next few years. Total land disposal gains may amount to a whopping RM26 billion or RM4.80 per share in the next 10 years or so, still leaving over 1,000 acres of prime land for property development.

Eco World yesterday announced to sell a piece of land of 124 acres in Pulai to Microsoft Payments for RM403m or at RM75 psf.

KSL has around 578 acres of land around the area in Pulai, if the land is revalued to RM75 psf, it would be worth RM1.93 billion or close to KSL's entire market cap of RM2.1 billion.

@Vicky, it is good to have some sort of control over new data centre builds that everybody is trying to jump into now, especially those who do not have any experience in this field and have not locked in sufficient power and water supply.

Lately some corporates are trying to jump into the data centre bandwagon just to get some limelight for their company stock, eg. Mah Sing who announced to form a JV to enter the data centre business. Just like few years back Mah Sing also jumped into glove manufacturing during the Covid glove mania, now it is trying to wind down the business and jump into another new field.

Data centres need lots of power and water supply, these companies who have no expertise in this field will suffer from inability to secure sufficient power supply or water supply, or suffer from below par returns due to highly priced power and water supply that they struggle to secure.

On the other hand, YTL Power has already secured sufficient land to build 500MW of solar power to power the data centres at its Kulai park, and I expect them to start installing the solar power once the first phase of AI data centre is about to start operations in early 2025, then the company will reap the max rewards from the relatively cheap power supply (solar power has a levelised tariff of below 25 sen/kWh compared to grid supply from Tenaga at over 50 sen/kWh) and secured supply when battery storage is installed at the site.

Not many employees will sell their ESOS now, as they know better than anyone here the good prospects of the company, especially those who are involved in the operations of PowerSeraya, Wessex, Jordan and AI data centre divisions.

@Unfair, YTLP's weak Q3 FY2024 result has been much discussed and talked about here and even exaggerated by local media and some local analyst. You are just being unfair here.

As I said before, Q3 was just a temporary blip as the drop in PowerSeraya earnings was not compensated by a rebound in Wessex and Yes' earnings in time. Most analysts have agreed on this and upgraded the target price for YTL Power after Q3 result, as the prospects of AI data centre are bright enough to drive the next phase of earnings growth for YTLP.

We shall see this in the upcoming Q4 FY2024.

Good closing!

Slow and steady up

No need to make a big fuss on UBS ceasing to be a substantial shareholder of YTL. It still holds 4%+ stakes in YTL and 3.5% in YTL Power. We don't know its next move.

It may start adding back YTL once HSR news gains traction or adding shares in YTL Power or MCement.

You simply cannot imply much from just one event. Similarly those traders who over-reacted to one quarter of weak results from YTL Power may regret now as share price shoots past RM5.00 again and may scale new highs months later. Long term investors need not worry too much about such volatility.

UBS had a direct stake of 0.44% in YTL Power and another 3.12% via Credit Suisse as of 30 June 2023.

UBS may adjust its investment portfolio after it fully took over Credit Suisse, no one knows whether it will pare down further stakes in YTL or increase stakes in YTL Power.

It does not matter, now local funds are big buyers of both YTL and YTL Power shares. Plus company share buyback and buying from Yeoh Tiong Lay & Sons Sdn Bhd, it should have strong support to share price.

@cwc1982, it shows that EPF has finally seen the deep values in YTL. I expect more buying from EPF in coming weeks, to gradually increase its holdings back to 5% level.

Yeoh Tiong Lay & Sons Sdn. Bhd. added 3.0 million shares in YTL Power on 31 May 2024, pushing its stakes in YTLP to around 65%.

That shows the confidence of the Yeoh family in the outlook of YTL Power.

Furthermore, YTL Power has got approval for up to 10% share buyback which will provide support to the company share price.

Based on records from CGS-CIMB, EPF started buying back YTL Corp shares by acquiring 1.2 million shares on 31 May 2024. That marked the first purchase by EPF after it pared down its stakes below 5.0% last year.

On the other hand, Yeoh Tiong Lay & Sons Sdn Bhd added shares in YTL and YTL Power yesterday.