Singapore dollars and british pounds both broke up resistance of 3.50 and 6.00 respectively. If this momentum continues to end of March, we can expect a bumpy earnings contribution from PowerSeraya and Wessex Waters for the Q3 FY2024 quarter. It is timely especially when Wessex is about to turn in profits from this Q2 FY2024 onwards.

@xiaochen, don't forget about SimplyyWlSt valuation of RM4.95 for YTLP

you need to download it fast before i3 admin removes it again

http://www.hlgs.hongleong.com.my/published/article/zmZNWR0YiO5dahboexorR-ydSzgn6bhC0NaR9pxoGFzNmwjLSFWOK0t_4vPbg5XKznYjFt_jl9kVeNtolHuL9HbQkqcOM_aIMrHCfZzrv3Y1

Post removed.Why?

Hong Leong research has been chun in last 2 rounds of upgrades, 1st to RM2.90 then to RM3.90. I believe this HLIB analyst Daniel Wong will be accurate in his projections

Post removed.Why?

Hong Leong research raises target price for YTL Power to RM5.15

Great!

Good news - ERL concession will be extended by another 30 years and ticket price will be market driven. It will pave the way for ERL to turn around and generate profits for years to come

@paperplane, yes RM100 million of dividend may not be realistic. I was just saying that PBA will have the financial capability to fund the capex and pay good dividends.

I would be happy with RM50 million or 15 sen per share of dividend every year, as it would yield me 7.5% p.a. at my entry cost of RM2.00.

At current price of 2.25, it will yield 6.7%

@observatory, it is now an opportune time to invest in infrastructure assets as the high inflation environment in past 1 year has inflated the asset value of infrastructure companies like Wessex Waters, while high interest rate environment has depressed the valuation of these infra companies (eg. water companies in the UK are depressed to 1.0-1.2x RCV only compared to 1.3-1.5x RCV before COVID).

With inflation cooling off in the US and UK, and interest rate cuts are being anticipated in 2024, infrastructure company valuation looks set to expand strongly later this year.

Capital expenditure will always be there for infrastructure companies like PBA.

For the contracted capex of RM107 million as of 31 Dec 2023, PBA will have no issue of funding it as its operating cashflows will be super strong post water tariff hike.

PBA had about RM88 million of operating cashflows for the 9 months to 30 Sept 2023, annualised to RM120 million thereabout. Post water tariff hikes, it will have another RM80 million of additional revenue / cashflows a year, making it almost RM200 million of operating cashflows a year.

PBA can afford to pay out up to half of this as dividend, i.e. RM100m or 30 sen a share, with still another RM100 million to fund capex.

Assuming capex is funded 65%-67% by debts, it can fund capex of RM100m/33% = RM300 million of capex each year.

If I add back depreciation & amortisation charges and minus out lease liabilities payments, operating cashflows of PBA will increase by another RM50 million a year. So free cashflows will be likely be more than 40 sen a share, and PBA can well afford annual dividend payouts of 20-25 sen.

weak holders and short term traders in PBA are being wiped out by strong funds' buying. Good bargain to have added more at 2.35-2.32 this morning.

With expected EPS of 40 sen every year after the water tariff hikes, PBA is trading at undemanding PER of under 6.0x.

With a huge net cash position, PBA can afford to pay out handsome dividends going forward. Assuming a 50% payout ratio, we may expect dividend payouts of 20 sen per share every year, and dividend yield may exceed 8%

@cgtan2020, foreign funds' holdings in YTL Power was 12% in 2014-2017, now at 11% it is still lower than previous highs.

Now there are more assets within YTL Power than in 2014-2017, such as Jordan Power already fully commissioned, 1st phase data centre for SEA Group is about to get commissioned, 1st phase AI data centre will take off in mid 2024, digital bank will start in 2H 2024, WTE plant will start construction later this year etc. So I would expect foreign funds' holdings in YTLP to surpass previous highs.

These foreign funds are just about to give a fair value to PowerSeraya:

net profit of SGD800m/year x PER of 11 = SGD8.8 billion x 3.50 = RM30.8 billion or RM3.80 per share of YTL Power

The market still ascribes zero value to the other assets of YTL Power - Wessex Waters, Jawa Power, Jordan Power, Yes 5G, digital bank, WTE plant project, data centre business, AI data centre collaboration with Nvidia, potential RE export to Singapore etc.

should be about 45 million shares of YTLP snapped up by foreign funds last week

@cgtan2020, thanks for the data.

It shows that foreign funds continued buying into YTLPower in a big way, scooping up some 35 million shares last week.

Bursa announcement on the other hand showed that UBS continued adding shares in YTL last week, buying up over 6 million shares.

Amazing that share price of Nvidia could move up by 175 times in just 13 years.

Looks like my wild dream of YTL & YTL Power becoming a 30 bagger (from RM0.52 and RM0.70 in 2022) in 10-15 years may not look so wild!

Mr. OTB, I do share your view that when the AI data centres take off in a big way in next 2-3 years, it is highly possible for YTL Power share to reach RM6.00-7.00.

Meanwhile, one needs to brace for short term impact from the selldown of other over-valued stocks, as the holders of these other stocks may also have holdings in YTL Power. Some may need to cover their margin position.

But as said before, the risk now is certainly higher than before as YTLP share price has risen much in past few months. One should have a long term view for holding this stock if buying on dips at current prices.

A good recent example is PBA which is being re-rated after the water tariffs are revised up.

The share price jumped up by some 25% yesterday immediately after the news. Most people would not dare to chase anymore or choose to take profit. But the share price continued running up today to new high. That strong buying was by big players who knew exactly how the stock was under-valued, and the fair value still gave substantial upside to the stock at RM2.30.

Now come back to YTLP, earlier this week, we saw big buying pushing YTLP share price up to RM3.90. That kind of buying in millions of shares was most likely by foreign funds who knew exactly how much YTLP should be worth. That clearly showed to me that the fair value for YTLP is way higher than RM3.90. One indication is by SimplyyWlSt who gave a fair price of RM4.93. Foreign funds should have referred to this as one reference, besides having internal assessment on the earnings outlook of PowerSeraya, Wessex, Jordan Power and potentials of AI data centres.

well said KingKKK.

No one can predict how the share price will move tomorrow or in the short term, but over long term share price movement should reflect the intrinsic value of a stock.

There is absolutely no point in trying to guess whether YTLP share price will rebound or continue sliding down tomorrow. It may suddenly jump to RM4.00 or drop to RM3.30, who knows?

But one thing is for sure, if the company earnings continue to be strong, the share price will go up eventually to reflect the fair value, irrespective of whether the share price has risen by 300% in past few months, or the share price has dropped by 15% in past few days.

I still see good chance for YTLP to test RM4.00 in coming weeks and to beyond RM5.00 in longer term.

@myloh123, I am not sure if there is any deal at the top between Jensen Huang and YTL Power, but I do see huge potential for the AI data centre collaboration between Nvidia and YTL Power. Recent reports suggest that data centre business is going to take off in a big way in next few years in this part of Asia.

@Seasons99, thank yourself for having the patience to read my long long articles and to hold this stock until now

A major re-rating is on the card

many thanks for @Neoh Jia An, @dollardollarbill and KingKKK for the good articles and information on PBA

@Mr OTB, your Insas and Insas-WC are also flying high in past 2-3 days. Hope you are making big money on these.

@KingKKK, congras on your PBA. It is flying high. I missed it

Btw, anyone here can share any other investment ideas?

As what chessgame99 suggested, one should not be too obsessed with any one particular stock no matter how bright the prospect is.

As YTL Power share price rises high with big volume, I see a little worrying trend as more and more retailers jump in and out as the stock is hot. This inevitably creates higher volatility in YTLP share prices, as we saw it swinging from a low of 3.61 to a high of 3.87 yesterday.

I will always advocate for long term investment holds, especially those who have recently bought in at higher prices. They must have a longer term view rather than doing short term trading, as we cannot simply time it right.

Though I still see significant upsides ahead for YTL Power, but no doubt the risk of entry now has become much higher, when compared to last year when share price was below RM2.00. So, you need to assess your own risk to match your investment horizon.

Net short position will inevitably increase as share price rises further, but I expect these shorts will be closed pretty fast.

Singapore USEP came down in Dec inline with softening crude oil prices that dipped below USD80/bbl. But again the fluctuations of USEP have little impact on PowerSeraya earnings.

@jeffchan1901, I started buying YTLP around RM0.70 and added more after seeing the strong quarterly results from PowerSeraya in May 2023 around RM1.00-1.20. Then along the way, I added a little bit more on share price dips, for example in June 2023 when Singapore EMA announced the implementation of TPC and YTLP share price dropped over 10% to RM1.15. That time, I remember I did call for ADD but am not sure if anyone followed.

Another good time to add was when it corrected to a low of RM1.88 from the peak of RM2.24. That time not only myself was adding, I think there were a couple of other gentlemen here also called for an add.

The most recent time good for add was when the share price corrected towards RM2.31 from a high of over RM2.50 after the deal with Nvidia was announced in late Dec. There were a lot of profit taking after the news, but I felt that the share price gain of few % did not reflect the huge potential of the AI data centre deal, so I added more. But each time I added smaller quantity as the share price became higher.

For the last time I added around RM3.35, I just bought back the small quantity that I sold at RM3.50.

The main reason I added along the way is because I think the share price is still undervalued at current prices, and there is still ample upside if I hold long enough. The key is also that I feel the downside is limited in foreseeable future for YTLP and it is not easy to find another blue chip liquid stock that has similar upside or higher dividend yield than YTLP at my average buy-in price.

@wkc5657, thanks for the complements. If you missed out on the early rally of YTL Power & YTL, it is always not too late to buy on dips or any meaningful correction. But do not chase high.

As Peter Lynch wrote about Warrent Buffet: " He doesn't care what the general stock market has done recently or will do in the future. He purchased over US$ 1 billion of Coca-cola in 1988 and 1989 after the stock had risen over fivefold the prior 6 years and over 500 folds the previous 60 years. He made four times his money in three years and plans to make a lot more the next 5, 10 and 20 years with Coke."

This statistic proves my earlier statement that weak holders from retailers have sold cheap tickets into the hands of foreign funds. As this round of foreign buying is very strong, they must know something we don't, and we have no way to time the purchase or sale of our tickets, so the better way is just to hold on until YTLP share price significantly exceeds the fair value.


According to statistics by Dibots, YTL Power was the most net bought stock by foreign investors in the first trading week of the year with recorded net buying of RM110.2mil.

Conversely, YTL Power was among the most net sold stock among local institutional (RM22.7mil), retailers (RM41.2mil), nominees (RM41.9mil) and proprietary (RM4.4mil) investors for the same week.

@myloh123, SimplyWl street has since revised up tp for YTLP to 4.93.

Pls check link posted by cgtan2020 earlier

@KLV868, without any detail about HSR, I am not able to make any projection as to whether HSR will be profitable or not.

But one thing I am confident of is that if YTL did get a portion of the HSR jobs again (like last time the southern portion was awarded to YTL), it would be profitable to YTL, at least for the construction work and supply of cement and building materials.

From its records, YTL group never undertakes any work that is not profitable. For instance, the first power station construction work completed by YTL in world record time of 15.5 months (compared to Siemens' typical 36 months), the JB-Gemas double-track railway work, the ERL work which has turned profitable years ago, and now Yes 5G is on the brink of breakeven.

HSR is a long game, it may take many years to build up the ridership to make the project profitable, but as the project is good for the economic development of the country and good for the people in connectivity, it will definitely be profitable eventually. Without knowing the funding structure, no one can tell when it will turn profitable.

Fantastic closing 3.68!

Congras to those who still hold on. You can go and spend some money at YTL hotels or restaurants or shopping malls to help pushing up earnings for YTL group. Have a good weekend.

@cgtan2020, congras to all. I am waiting for another 2 bags to come in next couple of months hopefully.

cgtan2020 was tight, net short position on YTLP has come down to zero

https://www.bursamalaysia.com/misc/missftp/sblnt/NetShortPosition20240111.pdf?t=1705040038

Intermittent profit taking along the way of a long rally is normal, weak holders just sell into big funds' money and those who can hold longer.

@ChloeTai, I did buy the first batch of Genting shares around RM4.60 all the way to RM5.00 early last year only to see it drop to a low of RM4.00. But I have added more from RM4.08 to RM4.30 to bring my averaged price to around RM4.50. Now I am in the money!

@cgtan2020, yes you were right. They just blocked any mention of other financial website link

Foreign funds may have more and faster info than us retailers, eg. some of them might have known that SimmplyWlSt was going to upgrade YTLP but we retailers only got to see it today

I have tried to post some comments at least 5 times but it just failed to get posted

ya frustrating

For example, I bought in Padini when it was lingering at RM1.20-1.30 at one time, then suddenly the share price jumped to above RM2.00, and after a short consolidation around RM2.00 then it rallied up non-stop to a high of RM4.60, then a short pause before it rallied further to RM6.00

@cgtan2020, I cannot remember which year, but rather individual stocks that foreign funds used to chase high previously.

I will just stop here until i3 fixes the problem

for some reason, I am not able to post long comments