YTL Power

[winston]

not vested

6742 YTLPOWR (BUY)
DC and LSS making progress

YTLP started weak with core PATMI RM625.9m (-24.7% QoQ; -19.4% YoY) in 1QFY26, below our FY26 forecast (19.2%) and consensus (22.3%), dragged by weaker than expected electricity pricing and margins of SG PowerSeraya.

Nevertheless, we expect YTLP performance to gradually improve in coming quarters, supported by UK WessexWater, Ranhill, LSS and DC contributions.

Despite earnings cut for FY26-27m, we remain positive on YTLP’s outlook, maintain BUY recommendation with a lower TP: RM5.08 (from RM5.55), based on 10% discount to FD SOP: RM5.65.

Source: HLIB

[winston]

not vested

6742 YTLPOWR (BUY)
DC and LSS making progress

YTLP started weak with core PATMI RM625.9m (-24.7% QoQ; -19.4% YoY) in 1QFY26, below our FY26 forecast (19.2%) and consensus (22.3%), dragged by weaker than expected electricity pricing and margins of SG PowerSeraya.

Nevertheless, we expect YTLP performance to gradually improve in coming quarters, supported by UK WessexWater, Ranhill, LSS and DC contributions.

Despite earnings cut for FY26-27m, we remain positive on YTLP’s outlook, maintain BUY recommendation with a lower TP: RM5.08 (from RM5.55), based on 10% discount to FD SOP: RM5.65.

Source: HLIB

[winston]

not vested

A slow start

Sequentially lower earnings YTLP’s 1QFY26 results missed our expectations due to lower-than expected PowerSeraya earnings.

We think concerns over the monetisation of DC/AI compute are gradually being priced-in as investors digest a delay in the full AI compute rollout and await a meaningful earnings contribution from the business.

Maintain HOLD with a lower SOP-based TP of MYR3.80 (from MYR4.25) following our earnings cuts.

Source: Maybank

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://mkefactsettd.maybank-ke.com/PDFS/501662.pdf

[winston]

not vested

YTL Power International Compressed margins at Power Seraya

1QFY26 saw notably weaker earnings from Power Seraya but this was partly negated by sustained strength at Wessex Water.

Profits from Power Seraya may see further erosion as its gas contracts get repriced and supply tightness ease with new capacities entering the market.

Maintain Hold with a lower SOP-based TP of RM3.30.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... CF10925A05

[winston]

not vested

6742 YTLPOWR (BUY)
Supported by water, DC and LSS

YTLP posted core PATMI of RM587.2m in 2QFY26 (-6.2% QoQ; -12.1% YoY) and RM1.2bn in 1HFY26 (-16.0% YoY), broadly in line with our FY26 forecast (46%) and consensus estimates (49%).

We are comforted by the easing decline in earnings at Seraya. The tariff hikes for Wessex and Ranhill are expected to underpin stronger group earnings, while the scheduled COD of DC and LSS projects should provide earnings uplift progressively.

We remain positive on YTLP’s prospects and reiterate our BUY call with an unchanged TP of RM5.08, based on a 10% discount to our FD SOP valuation of RM5.65.

Source: HLIB

[winston]

not vested

6742 YTLPOWR (BUY)
YTLDC to accelerate growth

YTLP is seeing active enquiries by US-based DC operators/developers to expand in Malaysia, supported by its strategic partnership with Nvidia.

With 300MW of capacity already secured, YTLDC is guiding for an aggressive expansion of 200MW annually, targeting a total capacity of 1.4GW by 2031 and potential annual EBITDA of RM6.5bn.

SG PowerSeraya remains largely insulated from rising gas costs, as higher fuel prices are passed through via higher electricity tariffs.

WessexWater is also poised for growth, with its RAB expected to expand to GBP7.5bn by 2030, further supported by inflation-linked adjustments.

We remain positive on YTLP’s outlook and reiterate our BUY rating, with an unchanged TP of RM5.08 (10% discount to FD SOP).

Source: HLIB

[winston]

not vested

YTL Power's DC business outlook looking rosy

Prospects will be buoyed by its data centre (DC) capacity expansion in the financial year 2027 (FY27) to FY28 and strong earnings growth by its subsidiary, Wessex Water, in FY26 to FY27.

The group recently secured 90MW of new co-location (co-lo) leases at Johor Data Centre 2 facility, and expects total contracted capacity to grow by 200MW per annum over 2026 to 2028.

Wessex has been allowed to raise its tariff by an additional 3% between 2024 and 2029 on top of the 17% granted by Ofwat back in December 2024.

The group is also exploring listing its DC unit, though no timeline has been provided.

Source: The Star

https://www.thestar.com.my/business/bus ... oking-rosy

[winston]

not vested

YTL Power International Improving earnings mix

We see YTLP’s earnings downgrade cycle nearing a trough as PowerSeraya stabilises, with improving visibility at WW and faster DC expansion.

Earnings mix improving; contracted and regulated streams rising to ~55% of PAT by FY28F, reducing concentration on volatile merchant power exposure.

We upgrade YTLP to an Add, with a higher SOP-based TP of RM4.60, as the improving earnings quality and visibility support a re-rating into recovery.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 77E17AE0E3

[winston]

not vested

YTL Power positioned for structural uplift ahead

Forecasts the group’s data centre (DC) segment to become a major earnings engine, contributing RM327mil in pre-tax profit (PBT) in the financial year 2028 (FY28), compared with an earlier estimate of RM120mil PBT for FY26.

Aggressive capacity target to grow its DC campus to 1,000 megawatts (MW) by 2028, doubling its initial 500MW target.

As of February 2026, YTL Power operated 110MW of live capacity, with the full 278MW facility expected to be operational by end-2027.

The Competition and Markets Authority has granted Wessex a 1.7% tariff uplift for the final three years of the 8th Asset Management Plan (AMP8) cycle (2027/2028 to 2029/2030).

Wessex suffered pre-tax losses of RM94.7mil and RM86.5mil in FY23 and FY24, respectively, as UK inflation spiked financing and operating costs.

The hefty inflation-related adjustments in FY25 have already repositioned Wessex Water as a significant earnings contributor.

The upcoming 3Q26 results have benefited Power Seraya from low input costs for the past three years. However, it now faces a phased transition to market rates.

The remaining low-cost blocks are scheduled to expire as follows: 20% in late 2027, 20% by August 2028, and the balance in 2029.

Source: The Star

https://www.thestar.com.my/business/bus ... lift-ahead