YTL POWER INTERNATIONAL

CIMB Research believes that YTL Power International is poised for stronger earnings growth in FY18, driven by higher earnings from Power Seraya, the Paka plant and narrowing losses from the mobile broadband segment.

It moved up its FY18-FY19 earnings per share (EPS) forecasts by 2%-3% due to the narrowing losses from its mobile broadband segment.

CIMB Research, which maintained its “add” call on the counter, pointed out that YTL Power’s mobile broadband business continued to generate positive Ebitda during the fourth quarter ended June 30, 2017.

Based on its estimation of depreciation charges of RM60mil per quarter, the company’s mobile broadband business delivered positive ebitda of RM121mil in FY17.

It said this was encouraging, given that this is the first full-year positive Ebitda reported by the division.

“We like YTL Power for its attractive valuation and decent potential dividend yield of 6.6% in 2018,” it said.

The research house noted that the group is building a US$2.7bil power plant in Indonesia and has a 45% stake in a US$2.1bil oil shalefired power generation project in Jordan.

“We believe that these projects offer double-digit returns on investment and their values are yet to be reflected in YTL Power’s share price,” it added.

Excluding the gains or losses related to asset disposals and foreign exchange movements, YTL Power’s core net profit for the fourth quarter ended June 30, 2017, fell 52% year-onyear to RM189mil, mainly due to lower contribution from shares of associates’ profit.