PETALING JAYA: YTL Power International Bhd
could see further valuation upside as capacity expansion and new data centre (DC) contracts unlock its potential 2.4GW Johor pipeline, says Hong Leong Investment Bank (HLIB) Research.
“Our recent industry checks suggest strong demand for DC capacity, with new developments being quickly snapped up.”
Further contract wins, land acquisitions and capacity expansion could provide strong upside to its valuation, it added.
“We value its DC segment at RM41.2bil, based on a conservative 500MW capacity, a 20 times enterprise value-to-earnings before interest, taxes, depreciation and amortisation (Ebitda) multiple and a potential Ebitda of RM2.2bil,” the research house said.
As of June 2026, YTL Power had invested RM10.6bil in its DC segment, including RM2.1bil via syndicated bank loans.
The group is also pursuing a RM15bil sukuk programme and has earmarked 2027 for an initial public offering to fund its DC ambitions, in line with other major DC developers.
HLIB Research said YTL Power has identified DCs and artificial intelligence (AI) as its key growth pillars.
Across its DC segment, the group has doubled its Kulai DC hub target to 1.2GW, with 300MW secured (150MW operational) and a further 200MW pending contract finalisation.
It has also acquired 145 acres of land at Sedenak West (Johor), with ready infrastructure for 1.2GW, bringing total potential capacity to 2.4GW, while actively seeking additional land for further expansion.
On AI, HLIB Research expects the segment to become a meaningful contributor to YTL Power’s valuation as capacity scales up.
YTL Power is a globally recognised Nvidia partner, supporting the deployment of advanced AI graphics processing unit (AI-GPU) infrastructure in Malaysia.
HLIB Research said the group currently had 20MW of AI-GPU capacity deployed and is in discussions to scale this to 100MW or more, supporting its internal AI applications and potentially offering GPU-as-a-service.
The research house has yet to assign a valuation to the group’s AI segment.
Meanwhile, YTL Power could also benefit from Ranhill Utilities Bhd’s role in Johor’s water sector restructuring, as approved tariff hikes support infrastructure investment amid rising water demand from the state’s growing DC and industrial sectors.
Ranhill Utilities’ earnings, cash flow and balance sheet have improved substantially following the tariff hikes implemented since August 2025.
HLIB Research also derived a conservative value of RM4.20 per share for Ranhill Utilities, excluding potential incremental earnings from three proposed water treatment plants worth RM3.5bil by 2030 under an independent water producer or self-financing structure.
The plants are intended to support Johor’s growing water demand.
YTL Power currently holds a controlling 53.19% stake in Ranhill Utilities.
“While we maintain our current earnings forecasts, we see meaningful upside potential should YTL Power secure new agreements across its DC hubs, AI-GPU services, independent power producers and independent water producers, which could drive incremental earnings beyond our current estimates,” HLIB Research further said.
It reiterated its “buy” call and raised its target price to RM8.08 from RM7.58, based on a 10% discount to its revised fully diluted sum-of-the-parts valuation of RM8.98.
The higher target reflects YTL Power’s expanding DC pipeline and expected earnings contribution from its new power-generation capacity.
