Kenanga Research keeps 'market perform' on YTL Power


According to the research house, earnings from Wessex Water, PowerSeraya and YES are expected to be weaker while the Paka's Extension PPA contract will expire in June 2021.

KUALA LUMPUR: Kenanga Investment Bank Research maintained its "market perform" recommendation on YTL Power International Bhd as the market appears to have priced in the weak earnings outlook for the group.

According to the research house, earnings from Wessex Water, PowerSeraya and YES are expected to be weaker while the Paka's Extension PPA contract will expire in June 2021.

In other developments, the 45%-owned oil share-fired Attarat Power Plant in Jordan is expected to be delayed from the scheduled COD in June 2020 while the 80% owned coal-fired PT Jati Power Plant in Indonesia is still working on its financial close, it added.

Meanwhile, the S$331mil acquisition of Tuaspring's assets is expected to concluded soon.

YTL Power's 9MFY20 core profit of RM297.7mil was below Kenanga Research's expectation at 63% of its full-year estimate but exceeded consensus at 88% of its full-year forecast.

The group however experienced a better sequential quarter in 3QFY20 with core profit rising 9% q-o-q to RM102.2mil, despite revenue falling 7% to RM2.59bil.

"Post-results, we cut FY20/FY21 estimates by 14%/11% on higher sewerage costs in 3QFY20 and widened YES losses dampened by price wars," said Kenanga.

Kenanga Research believes the negatives should have been priced in and raised its target price on YTL Power to 65 sen from 57 sen previously as it reverted its valution method to earnings-based sum-of-parts from price-book value.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 18
Cxense type: free
User access status: 3
   

Did you find this article insightful?

Yes
No

50% readers found this article insightful

Next In Business News

Mesiniaga sees turnaround in 2021 after dismal 2020
HLT Global reports robust growth in profit margins�
Hong Kong arrests 12, seizes US$116mil after stock scam
Axis REIT buys industrial property in Shah Alam
Teladan Setia’s public offer of 40.8m new shares oversubscribed 17.47 times
Beware of frothy SPACs, London Stock Exchange warns investors
Crude oil price surge pushes FBM KLCI above 1,600
Bank Negara forex reserves higher at US$109bil
Oil soars to near 14-month high as Opec+ extends output cuts into April
China blue-chip index ends lower after Beijing sets conservative growth target

Stories You'll Enjoy


Vouchers