@cktay, the Sabah PoP project was secured by YTL Comms to lay fibre optics cables in Sabah. The project will span over 3 years and has contributed to higher revenue to the telecommunications segment of YTLP in Q4 FY2024, hence helped to turn around the segment.

We may expect similar contributions in FY2025 and FY2026.

As for Brabazon property project, the earnings projection is based on the following assumptions and basis:

approved development plan of 6,500 new homes
and 4 million sf of commercial areas may contribute net profit of RM225 million a year
to YTL Power for next 10 years (based on assumed average selling price of GBP275k
per house, total GDV of GDV1.8 billion over 10 years, 25%-30% gross margin and
GBP50m gross profit a year at 25% tax rate), increasing over time to as high as RM600
million as the commercial areas are fully developed and leased out (assuming all 4
million sf of commercial space to be leased out at GBP25-30 psf per month to
generate gross rental income of GBP100-120m/year, deduct 25% of miscellaneous
charges and 25% tax).

The increasing earnings contribution is due to the increasing commercial space for rental income as more commercial properties are developed over the 10 year period.

@raymondroy, thanks for the queries which are good for us to discuss and firm up the projections.

First on PowerSeraya earnings, it is inevitable for its generation / retails margin to gradually come off the peak in FY2024 as more new capacity comes onstream, eg. an OCGT of 200-300MW coming in 2025 then 2 units of 600MW CCGT from Keppel and Sembcorp coming in 2026. My base projection assumes that these new units will replace part of Keppel and Sembcorp's older units and electricity demand growth in Singapore is as high as what EMA projects. I may need to do some revision if actual situation turns out to be different from these base case assumptions.

As for FX, I usually do not speculate on FX movements so I just use a base rate of SGD1.00 = RM3.48 which was the average in Q4. Similarly when I first wrote on PowerSeraya 2 years ago, I think I used the prevailing FX then of 3.30. Nobody knows how the FX may move in the future, some predicts ringgit to further strengthen against USD and SGD but I tend to think that a country's currency is always tied to its economic strength in the long run, as evidenced from the decades-long appreciation of SGD against RM. Remember late last year, most people were thinking that RM would drop to RM4.00 to SGD1.00 and RM5.00 to USD1.00 but it stopped somewhere before.

@Mabel, congratulations on making good profit out of the mini crisis in YTL Power. Short selling activities on YTLP have been rampant in past 2 weeks with NSP building up to over 18 million shares, and shorties sending troops to spread unfounded bad news about the company. Making things worse is the persistent foreign funds selling though this has eased starting this week.

Under such circumstances, it really takes gut and strong faith to buy into YTLP at RM3.77 almost the lowest point. You only have yourself to thank, I believe. You are cool and calm, something many admire.

As for the digital bank JV, YTLP has issued a statement to say that it is well on track for commercial roll out by end 2025.

You are probably right that there will be start-up losses from the digital bank JV, and these start-up losses should be capitalised as capex in 2024 and 2025 before the commercial roll out.

After the commercial roll out, initial operational losses should then be expensed off in the P&L and I have budgeted for some losses in FY2025 and FY2026. On the hindsight, I think now I should have moved the loss in FY2025 to FY2027 as such loss should be capitalised instead in FY25.

@raymondroy, the colocation data centre with SEA Ltd is only completed the first phase of 8MW, the remaining 24MW to be rolled out progressively over the next few months. As the 1st phase of 8MW was completed in early April 2024, I understand that YTLP has recognised some start-up costs in Q4 FY2024 which has offset against the earnings contribution from the 1st phase. I hope we can see more meaningful contributions in quarters ahead.

When there is earnings contribution from the colocation data centre, it will be parked under Investment Holding activities. I hope they will segregate this segment out when earnings contribution becomes meaningful later.

@Beta Ipoh, I do not know when exactly Brabazon project will hand over the keys to the first phase buyers, but I have assumed meaningful earnings contribution from this Brabazon property division to YTL Power in FY2025.

The first few phases tend to be residential landed homes, we may only see commercial property offerings a couple of years down the road.

@ValueInvestor888, the Yes 5G division registered a small profit in Q4 FY2024 due to recognition of some project revenue. I am not too sure if there will be any more project revenue to be booked in FY2025.

In my own projection, I do forecast small project revenue recognition which will offset against small losses in the 5G retails segment in FY2025.

https://klse.i3investor.com/web/blog/detail/dragon328/2024-08-22-story-h-153386818-YTL_A_Fantastic_Year_with_Pleasant_Surprises_in_Q4_FY2024

For your leisure read over lunch

https://klse.i3investor.com/web/blog/detail/dragon328/2024-08-22-story-h-153387597-YTL_Power_A_Big_Surprise_Q4_FY2024

For those who are interested to read

@Beta Ipoh, The UK Brabazon property project is well on track and is the final stages of delivering completed homes to the buyers in the first phase. UK accounting standard for property sector requires the property developer to hand over the keys before it can recognise the revenue and income, so there was no meaningful contribution yet to YTL Power in FY2024.

You may take a look at the update news below for an enlarged development plan:

https://www.bbc.com/news/uk-england-bristol-68434412

Mr. OTB, I am still in the preparation of the analysis report and will post it tomorrow.

Some quick comments:
1) Q4 result is way above my earlier projection of RM800-900 million net profit
2) PowerSeraya as expected posted net profit of SGD189m, within my expected range of SGD180-200m
3) Wessex turns around as expected
4) one surprise was a turn around in Yes 5G business
5) another thing I missed out is the fair value gain from Ranhill acquisition

The market signals in past few days have been confusing as rampant short selling activities did force hands of many retailers to sell off their holdings in YTL Power. I was confused at one point. But fundamentals prevail and faith has kept my long term holdings intact.

The selling today is rather unusual, trade with caution.

YTL drop today is dragged down by the heavy selling of YTL Power this morning. YTLP is facing the final rounds of dumping by foreign funds who may hold less than 40m shares after the selling of RM20m yesterday and estimated another 10m shares this morning.

But I think many shorts have been covered at RM4.00 level. YTL drop today is unwarranted.

New high of RM1.51! So good...

This stock has been the darling of the stock market. It has given us fundamental investors very good gains of up to 700% in past 1 year, a good place for foreign funds to park their money in early 2024 and good gains of 50%-100% to foreign hot money, and good trading range to traders as well as good bets for shorties (who have gained over 20% when share price dropped from RM5.00 to now RM4.10).

The tide is about to turn, as long term local institutional funds buy into YTL Power and I expect them to enjoy steady gains of 100%-150% in next few years as YTL Power net profit approaches the RM7.0 billion mark or EPS of 80 sen.

The fact that IBs continue issuing new call warrants on YTL Power shows the good prospects for its share price in coming months.

RHB, Ambank, Maybank, CIMB, Kenanga and Macquarie have issued new call warrants on YTLP in past few weeks, with conversion price as high as RM5.88 (MIBB, Kenanga) and RM6.38 (Macquarie) which correspond to the range of target prices given by these IBs.

There is nothing wrong with YTL Power fundamentals. The share price drop in past few weeks is just normal to me as foreign funds take profit after buying the stock in Jan-Feb 2024 in a big way. The holding period of these foreign funds is typically 4-6 months, so it is about time for them to exit YTLP after gaining 50%-100% profits in few months.

The selling on YTL Power is aggravated by rampant short selling activities, but total net short positions on YTLP is not really huge at 18m shares compared to 8.2b share base. On a good day, YTLP traded volume can get over 40 million shares which will give chance for these short positions to unwind easily in a single day, and I expect most of these short positions to close shortly after Q4 result announcement as after that there will be nothing for them to short for.

Rotational plays by foreign funds is one of the reasons, today they have switched to banking stocks very obviously.

Another reason for the drop in YTLP shares is likely due to rampant short selling activities. RSS on YTLP increased by another 1.1 million shares today, bringing total NSP to over 18m shares.

I expect most of these short positions to be closed out once Q4 result is out.

Not to get panicked. YTL Power has been under selling pressure likely due to rampant short selling activities. Net short positions on YTLP increased by another 1.1m shares today to over 18 million shares. The shorties are playing a dangerous game as local funds are buying big on YTLP and foreign funds' holding in YTLP has reduced by 90% since Jan 2024.

If they are betting on a disastrous Q4 result then they will likely get disappointed.

Foreign funds have no more share holding in YTL Corp, and hence there is not much short selling on YTL.

Latest Sembcorp 1H 2024 result shows that its power business earnings came down by about 26% y-o-y, which confirms that every genco will see its earnings reduced from the peak quarters in Q1 & Q2 2023 when the pool prices were sky high. But Sembcorp's core earnings confirm that the Singapore power sector continued contributing good profits to the group.

I maintain that PowerSeraya will contribute good profits to YTL Power in the upcoming Q4 FY2024, with estimated net profit contribution of SGD180m to SGD200m.

The selldown on YTL Power last week was partly exaggerated by short selling activities. Net short selling position on YTLP increased by 2 million shares last Friday to a total of 13.1m shares.

But with improving earnings outlook from this Q4 FY2024 onwards, shorties are playing a dangerous game. Latest statistics shows that foreign funds' holding on YTLP has come down below 70m shares and foreign funds' selling has reduced substantially compared to in July and June. Local institutional funds have been scooping up YTL Power shares in a big way, the latest move was a net buy of RM14 million worth of YTLP last Friday alone.

@raymondroy, I beg to differ on IOIPG's upcoming Q4 FY2024 result. IOIPG registered a headline net profit of RM235m in Q4 FY2023 due to some extraordinary gain of RM128m, striping out the EI, core net profit for Q4 FY23 was RM108 million.

I believe IOIPG's upcoming Q4 FY2024 will beat last year result in terms of headline profits as well as core net profit.

Furthermore, when Shenton House is redeveloped and tenanted out, potential gross rental income may be about 503,000 sf x 80% NLA x SGD14.00 psf x 12 months = SGD68 million a year. At the same valuation of 3%-4% yield, Shenton House may be valued at SGD1.7b – SGD2.2b. Injecting Shenton House into the Singapore REIT would bring in cash proceeds of SGD850 million to SGD1.1 billion to IOIPG. This would bring down the Group’s net gearing ratio from 77% (assuming IOICB valued at SGD5.0b) further to 63%. If IOICB is revalued to SGD6.0 billion, then net gearing will fall further to 56%.

IOIPG has no issue of high gearing, it is more like certain parties' bad mouthing of the company's success in IOI Resorts City and Singapore CBD projects.

Assuming IOIPG acquires a 100% stake in Shenton 101, the acquisition cost would amount to SGD1.01bn, while net gearing is estimated to increase to 88.8% from 73.3% as at 31 Mar 2024. While there are persistent concerns among investors on the elevated net gearing level of IOIPG, I think investors should not be overly concerned about this. Firstly, IOIPG is expected to recognize substantial revaluation gains upon the completion of IOI Central Boulevard in September 2024, which should lower its net gearing. For instance, if IOICB is valued at the minimum SGD5.0 billion, IOIPG would book in a revaluation gain of SGD1.0 billion which will increase shareholders’ funds and reduce the net gearing ratio to 77% from 88.8%. A revaluation to SGD6.0 billion would lower the net gearing to 68%. Secondly, the group’s property investment and hotel assets are strong cash flow generators, which should help to service interest and debt repayments. For 9M FY2024, IOIPG registered almost RM250 million of segmental profits for its Property Investment segment. Added back depreciation charges of about RM50m, operating cashflows generated from Property Investment amounts to RM300m in 9 months, annualized to RM400 million. When IOICB is completed and tenanted out, potential gross rental income may top SGD200 million a year. Therefore, total rental income from investment properties may top RM1.0 billion a year.

HLIB raises tp for IOIPG to RM3.60 today. Nice

@cwc1981, overall I expect YTL upcoming Q4 FY2024 result to be slightly better than Q3 FY2024 when it achieved PBT of RM1,079m and net profit of RM496m.

I expect YTL Power to post a slightly better Q4 profit compared to Q3 but YTL's hotel division may report slightly lower profit compared to Q3 which was seasonally strong, so these 2 divisions may offset each other. Mcement should continue posting strong earnings as in Q3.

Construction division should report better profit than the RM9m PBT in Q3 and property investment & development division contribution is not significant.

For the placement of 66m MCement shares in the quarter, the extraordinary gain that may be booked in would amount to (RM5.00 - 3.80) x 66m = RM79 million, assuming the cost is RM3.80 per share when YTL took over Lafarge Cement.

Whatever those jokers in YTLP forum try to argue for, I don't really care.

The important thing is that we continue making money from the stocks we invest in as we have done enough homework and have strong conviction in the companies we have studied. At the end of the day, the market will give a fair value to the stock to reflect its fundamentals.

I would say YTL is looking to preserve some cash for upcoming mega projects.

I would be happy to see a final dividend of 5.0 - 6.0 sen, with a surprise for 9.5 sen.

YTL Q4 FY2024 result is expected to be strong, as continued strong earnings contribution from MCement and YTL Power will sustain the core earnings at elevated level.

There is a chance for YTL to book in extraordinary gain from the private placement of MCement shares in the quarter.

As the deadline looms for IOIPG to hold an EGM to vote on the Shenton House proposal (by end Oct 2024), the management should have appointed an independent advisor to prepare a feasibility study report for minority shareholders to consider on the Shenton House proposal. I will wait for that report to be out and the date of EGM to be fixed to decide on next moves.

The selling today and last Friday was done by foreign funds due to fears of a US recession coming and escalating conflicts in the Middle East. Intelligent reports suggest that Iran will strike on Israel as early as today itself, this to me is the biggest uncertainty right now.

The fear of US recession is not my biggest concern as there have already been signs that US economy is in a bad shape. While this may have big impact on US/regional stock markets and currency movements, I do not expect it to have any serious impact on IOIPG's business operations and its earnings prospects.

As I can see some foreign funds were selling on IOIPG (net sell of RM8m last Friday, today could be more), I will stay defensive and will accumulate more towards RM1.80 which is the lowest level of the year and the lowest entry cost of foreign funds.

This is a broad based selling by foreign funds on fears of a US recession and escalation of conflicts in the Middle East (reports saying that Iran is going to strike Israel as early as today).

Any buying must be on long term investment basis, and holding period must be long enough to ride through these few months of volatility.

@rchi, there won't be any forex loss to be booked in by YTL Power for ringgit appreciation against Sing dollar. Of course YTLP will book in less profit in ringgit terms from PowerSeraya.

On the contrary, YTLP may book in a forex gain if it wants to for the SGD1.0 billion borrowings sitting at PowerSeraya, instead of RM3.5 billion earlier, now it has become RM3.3 billion of borrowings in ringgit terms. YTLP could book in a forex gain of RM200 million if it chooses to.

It is clear to me that the selling today is done by foreign funds, no stock is spared, especially those construction and property counters bought in a lot by foreign funds in May-June 2024, eg. WCT, SP Setia, Sunway, Gamuda and even tech stocks like MPI and Inari.

The drop in YTLP is relatively muted due to strong fundamentals, and it remains as the cheapest blue chip in Bursa at forward PER of only 9.7x FY2025 earnings.

Long term investors should not be worried too much as YTL Power earnings will continue to grow in next few years.

Rather than looking at the computer screen on the share price short term volatility, I would rather watch Olympics badminton matches coming up in the afternoon.

Selling this morning should be done by foreign funds, as latest data shows that they offloaded some RM25m worth of YTL shares yesterday but most of them were picked up by local funds.

Selling this morning is likely due to foreign funds' fear of escalating conflicts in the Middle East, also spooked by the drop in US stock markets overnight.

YTL Power's ESOS is not an issue as explained before. Most employees are locked in some form of moratorium and will hold the ESOS shares for long term.

Foreign funds started buying big on YTL Power in early Jan 2024 when the share price surged up from RM2.50 to RM3.60 in 4 days. They continued buying big in March-April 2024 when share price was between RM3.60 to RM4.24. I suspect the average cost for foreign funds should be above RM3.00.

My facts posted are right, you get them removed it is wrong.

Not forgetting YTL still owns several unlisted hotels which may be injected into YTL REIT later, and that would bring in cash of at least RM3.7 billion over next few years.

Correct, YTL placed out 5% stakes in MCement at close to RM5.00 per share, bringing home cash of about RM325 million. That was mainly to comply with the minimum free floats of 75%.

Now YTL is left with 73.5% stakes in MCement. YTL could placed out another 3.5% stakes in MCement and retain 70% majority stakes. Based on current share price of RM5.80, placing out 3.5% stakes in MCement would bring in cash of another RM270 million.

Wasting time here, most posts get removed anyway

Mr. Fox, watching Olympics badminton matches is more exciting, right? Cheers

At the end of the day, I still believe they will do the right things for the sustainable development of the water assets in the UK. I am looking forward to a gradual improvement in the WACC for return on capital to above 4.0% from 3.72% in the second draft determination in July 24 and around 3% in the 1st draft determination in Dec 23.

And it would be also disastrous for most of the water consumers including industrial users in the UK, for any under-investment in water infrastructure will not help in spurring any new investments in UK economic activities, and household users will continue to be affected by below par water services for years to come.

I cannot be bullish on Wessex's financial performance in next few years based on the draft determination of Ofwat. It would be disastrous for Wessex and most of the other 9 water companies in the UK should Ofwat not improve on the preset returns on capital in its final determination in Dec 2024.

StartOfTheBull

How good will the return for Wess*x Water in the near future if so many problems kick in?

49 minutes ago

Exactly what you said below. If water companies are not allowed to increase water tariffs, how would them be able to fund the capex for next few years and arrest any leakage / resolve any water supply problems?

StartOfTheBull

Will subscribers for the water supply default or delay payment to settle water bills?
How to attract new investments if water tariff not allowed big increased to cover big additional cost of water supply?

1 hour ago

Thank you @Mingci Toh for re-posting my posts that have been removed again, so that I do not have to repeat and rewrite everything.

Post removed.Why?

But don't take my words as granted, you need to check the announcement and the background of NSL to do own assessment of the merits of the deal.

The market generally did not give a positive response immediately after the acquisition news, as most only see that NSL registered a loss in 2023 and YTL was acquiring a loss-making company. Time will tell who is right.