PETALING JAYA: YTL Power International Bhd
could be exploring another major data centre (DC) development opportunity in Selangor, with its proposed investment in a 1,623-acre freehold site in Bukit Kerayong potentially adding substantial capacity to its existing DC ambitions.
In a company update, TA Research said YTL Power, through its wholly owned subsidiary Bukit Kerayong Industrial Venture, would take up a 35% stake in Bukit Kerayong Industrial Developments Sdn Bhd (BKID), a joint venture with SD Guthrie Bhd and Bumi Assets.
BKID will acquire the 1,623-acre land from SD Guthrie for RM933.6mil to develop an integrated industrial park comprising light-to-medium industrial facilities, commercial components and supporting infrastructure.
While details of the proposed development remain limited pending the finalisation and approval of the master concept plan, TA Research said the possibility of incorporating DC facilities should not be ruled out.
The research house added that if 30% of the Bukit Kerayong land area is allocated for DC development, it estimates the site could accommodate two gigawatts (GW) to four GW of hyperscale DC capacity.
“To put this into perspective, YTL Power is currently targeting an aggregate DC capacity of 2.4GW across the two sites,” it noted.
“Should our expectations for the Bukit Kerayong development materialise, the site could potentially more than double the group’s eventual gross DC capacity.”
TA Research also highlighted the site’s strategic location, approximately 6km north of Kapar Town, where the Kapar Energy Ventures power plant is situated.
It said it will maintain its “buy” recommendation on YTL Power with an unchanged sum-of-parts-derived target price of RM6.53, representing a potential upside of 23.2% from its last traded price of RM5.30.
Similarly, MBSB Research said it is positive on YTL Power’s prospects, supported by the progressive ramp-up of its DC operations in Kulai, expansion into STeP West and growing opportunities in power and digital infrastructure.
“We view the Bukit Kerayong joint venture as another potential strategic milestone that could materially expand the group’s development pipeline over the longer term,” it added.
Additionally, MBSB Research noted that in the long term, the group had strong potential.
“Beyond the planned up-sizing of Kulai from 600 megawatts to 1.2GW, YTL Power’s initial 145-acre parcel at STeP West could accommodate up to 1.2GW.
“The group also holds an option to acquire an additional 400 acres at STeP West, which could theoretically support another 3.3GW, assuming a similar development density.”
Furthermore, it said it will maintain a “buy” recommendation on the stock with a target price of RM5.98, implying an financial year 2028 price-to-earnings (PER) ratio of 22.1 times.
“At its current share price, YTL Power is trading at 19.6 times FY28 forecast PER, which still provides an attractive entry point, in our view.”
