In a note on Wednesday, the research house said its 6.4% net dividend yield is deemed attractive and sustainable.
"We believe YTLP’s 10 sen DPS is sustainable given our annual free cash flow forecast of RM403-566mil over FY15-17E, and if boosted by RM150-165mil in dividend contributions from YTLP’s associates, would imply an “all-in” free cash flow of around RM550-730mil (8-11 sen/share)," it said.
Affin said there is a good chance of a PPA extension for YTLP, and hence now factor in a 5-year extension to YTLP’s PPAs (vs. no extension previously).
"Our forecasts factor in annual capex of RM1.5bil, broadly in line with YTLP’s historical spend of RM1.3-1.6bil.
"We also raise our RNAV and 12-month TP for YTLP to RM1.84 (from RM1.70) based on an unchanged 10% discount to RNAV," it noted.