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By Ying Xian Wong
YTL Power International Bhd. shares jumped early Friday helped by optimism over its outlook after it posted robust fiscal fourth quarter earnings.
Shares in the Malaysia-listed company rose as much as 11% and were recently 6.3% higher at 1.86 ringgit, bringing their year-to-date gain to 162%.
YTL Power late Thursday said its fiscal fourth-quarter net profit was sharply higher at MYR1.13 billion ($243 million), compared with MYR412.4 million in the same period a year earlier. The rise was mainly due to higher contributions from its Singapore power plant and higher investment income. Quarterly revenue increased 56% on year to MYR7.09 billion.
Hong Leong Investment Bank believes the company’s current valuation is relatively undemanding, given its Singapore’s unit strong earnings recovery. It raised YTL Power’s stock target price to MYR2.90 from MYR2.05 and maintained its buy rating.
YTL Power’s fiscal 2024-2025 earnings forecasts were raised 31% and 80%, respectively, to factor in higher expected revenue and improved margins, Hong Leong analyst Daniel Wong said in a note.
RHB Investment Bank raised YTL Power’s target price to MYR2.21 from MYR2.00, and also maintained its buy rating.
YTL’s power division could deliver solid earnings in future and profits from its joint venture and associates may improve in fiscal 2024, given it will receive a full year’s contribution from its newly launched Jordan plant, RHB analyst Sean Lim said in a note.
Lim raised YTL’s fiscal 2024-2026 earnings estimates by 10%-11%, to account for higher contributions from its power generation division as well as profit from its Jordan plant. He added that the company’s stock is trading at an attractive valuation of eight times its fiscal 2024 price-earnings ratio, based on RHB’s earnings forecasts.
Write to Ying Xian Wong at [email protected]
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