PETALING JAYA: YTL Power International Bhd
, which is exploring the listing of its data centre (DC) business next year, could unlock the full value of the business, with RHB Research estimating that the DC unit could be valued at RM28bil, or RM3.06 per share.
This assumes YTL Power lists its non- artificial intelligence DC business at 20 times enterprise value-to-earnings before interest, taxes, depreciation and amortisation (Ebitda) based on RM1.4bil in Ebitda.
“This presents a 12% upside to its current sum-of-the-parts valuation, implying a bull-case target price of RM6.63,” the research house said in a report.
At the time of writing, the stock’s price rose 7% to RM4.49, hitting its highest level in nearly two years.
Following a visit to YTL Power’s 600 megawatts (MW) Green Data Centre Park in Kulai, Johor, RHB Research said the group has already contracted 298MW of capacity, with approximately 70% of the facilities physically completed.
“To meet demand, management had commenced the construction of another 260MW DC capacity to be completed by end-2027.
“We now estimate the DC capacity to reach 578MW by end-financial year 2028 (FY28) versus 420MW in our earlier assumption,” the research house added.
Given the robust demand, it said the group is now targeting to build up to 1.2GW capacity at the DC park versus the initial target of 600MW.
To this end, management is targeting to contract 200MW capacity annually, and is in talks to secure another 600MW of electricity supply from Tenaga Nasional Bhd.
According to the research house, YTL Power is planning to build a 600MW solar farm on-site, with 215MW already commissioned.
The company is also exploring opportunities to expand its DC footprint into the Klang Valley, other Asean markets and the United Kingdom.
The research house said it has raised the stock’s target price to RM6 (from RM5 previously), citing a stronger DC rollout and higher earnings contribution from its associate, Ranhill Utilities Bhd, and a potential 11% upside from the listing of YTL Power’s DC business.
However, one analyst said the stock’s recent share price rally has made the stock’s risk-reward profile less compelling.
While remaining positive on the group’s strategic expansion on DC developments, he said weaker earnings from Singapore subsidiary Power Seraya could weigh on near-term sentiment.
For the nine-month period of FY26, Power Seraya’s profit before tax fell 40% year-on-year, mainly due to a plant maintenance shutdown and a stronger ringgit against the Singapore dollar.
Additionally, it had to procure approximately 10% of its gas supply at higher prices due to a force majeure event affecting one of its suppliers.
He expects Power Seraya’s earnings to remain weak in the fourth quater of FY26 due to ongoing plant maintenance and force majeure issues affecting one of its gas suppliers.
However, he sees a recovery in FY27 as gas supply normalises, while higher retail tariffs are expected to support margin expansion.
