PETALING JAYA: MBSB Research is maintaining its “buy” recommendation on YTL Corp Bhd
with a revised target price of RM3.44 from RM3.26 previously, after incorporating its new target prices for YTL Power International Bhd and Malayan Cement Bhd.
In a report, the research house said it continues to like YTL Corp as the company is well-positioned to ride the infrastructure upcycle, as well as its strategic venture into data centres (DCs) and renewable energy via its utilities division.
“The group’s cement and building materials business is also a direct beneficiary of a strong construction sector, with projects such as warehouses, DCs and residential projects, with the upcoming Johor-Singapore Special Economic Zone set to serve as a new growth catalyst.”
Separately, the research house highlighted that YTL Corp, through its unit YTL Cement Bhd, has issued an unconditional mandatory takeover offer for Concrete Engineering Products Bhd (Cepco) for all the remaining ordinary shares it does not own.
“The group is offering a cash consideration of RM2.60 per share.
“YTL Cement recently acquired a 53.49% stake in Cepco for RM103.8mil and is now extending the offer to the remaining 46.51% stake. The first closing date for the offer is on May 13, 2026.”
In the maximum scenario, MBSB Research said this would involve an additional RM90.2mil.
“Cepco is a manufacturer of spun concrete piles and poles in Malaysia.
“We view that the acquisition strengthens YTL Cement’s vertical integration strategy by adding substructure precast capabilities and will synergise well with its existing cement, aggregates and precast superstructure operations.
“Demand for precast concrete is expected to be favourable in the long-term, supported by the need for higher productivity, faster project delivery and better construction efficiency across public infrastructure, residential, industrial and DC developments.”
MBSB Research said YTL Cement intends to maintain the listing status of Cepco.
“Cepco core earnings of RM19.5mil in financial year 2025 (FY25) ending August is equivalent to a core earnings per share of 26.1 sen.
“YTL Cement’s offer price of RM2.60 translates to a FY25 price-to-earnings (PER) ratio of 10 times, which is fair in our view.”
MBSB Research noted that Malayan Cement is currently trading at 16-times, based on a one-year forward PER.
“We view the acquisition as strategically positive for YTL Corp as it strengthens YTL Cement’s downstream building materials ecosystem.
YTL Corp reported higher quarter-on-quarter earnings for the second quarter ended Dec 31, 2025 (2Q26), supported by improved contributions across most of its business segments, while revenue remained largely stable.
The group recorded revenue of RM7.59bil for 2Q26, broadly unchanged from RM7.64bil in the preceding quarter.
However, pre-tax profit rose 9% to RM1.06bil, while profit after tax increased 19% to RM788mil.
In a statement, executive chairman Tan Sri Francis Yeoh Sock Ping said the group continues to deliver solid results, noting that revenue remains comparable to the 1Q26 while profitability improved due to stronger contributions from most operating divisions.
“The group continued to record solid results in the second quarter of FY26.
“Revenue approximated that of the previous quarter, whilst the higher profit before tax was the result of increased contributions from all business segments save for the construction and utilities segments,” he said.
For the first half ended Dec 31, 2025 group earnings before interest, tax, depreciation and amortisation stood at RM4.5bil, slightly lower than RM4.7bil recorded in the corresponding period a year earlier.
In a filing with Bursa Malaysia on its latest financial results, YTL Corp said the group expects the performance of its business segments to remain resilient due to the essential nature of its operations.
YTL Corp said it will continue to closely monitor the related risks and impact on all of its business segments.
