YTL Power to benefit from US policy


PETALING JAYA: YTL Power International Bhd may potentially be a “net beneficiary” of the United States’ restrictive export policy on artificial intelligence (AI) chips.

With the policy in place, YTL Power’s data centres (DCs) may also have an edge over China-related DC developers, said Hong Leong Investment Bank (HLIB) Research.

The research house added that YTL Power’s planned 100MW AI DC translates into about 55k GB200 graphics processing units (GPUs) (or 140k H100 GPUs equivalent), and are well within the new US rulings.

YTL Power can apply for the National Validated End User (NVEU) status in order to secure enough GPUs for its DC park in Kulai, Johor.

DC operators under the NVEU status will be entitled up to 320k H100 equivalent GPUs over two years. HLIB Research also said that the government can also help YTL Power secure advanced chips.

“The government can enter into government-to-government (G2G) deals with the United States if YTL Power develops the 100MW over a longer four to five year period.”

The Biden administration’s new export ruling is currently under “comment period” and will only be finalised 120 days later.

However, it could potentially be further modified or relaxed, once Donald Trump takes charges as the new President.

The new rulings have faced various backlashes, including from the technology industry such as Nvidia and the European Union nations.

Malaysia has been classified as a Tier 2 country, permitted to import only 50k GPUs (based on H100) over two years (from 2025 until 2026). G2G deals could bump up the cap to 100k GPUs.

Additionally, DC operators with a Universal Validated End User status such as Amazon, Google and Microsoft would be restricted to deploying a maximum of 7% of their computing capacity within any single Tier 2 country (outside their home country, provided at least 50% of their capacity is in their home country and 75% in Tier 1 countries).

HLIB Research said YTL Power remains on track to commence the first 20MW AI infrastructure in the second quarter of 2025.

“Existing DC1 (Shopee) and DC4 progress rollout are not affected by the new rulings.

“In fact, we anticipate that YTL’s DC will gain more interest (versus China-related DC developers) from global DC operators and subsequently accelerate the rollout of its remaining DC plots.”

The research house has maintained its “buy” call on YTL Power, with an unchanged target price of RM7. The current share price retracement represents a good opportunity to accumulate, it said.

“Current negative stock sentiment is fuelled by over concerns, with lack of understanding and details on the new US rulings. Current valuation remains undemanding, given the strong earnings of YTL PowerSeraya Pte Ltd in Singapore, earnings growth of WessexWater in the United Kingdom and commencement of DC projects,” it said.

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YTL Power , AI , data centre , restriction , China

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