CIMB Research raised its estimates for YTL Power’s financial year 2026 (FY26) and FY27 core earning per share by 5% and 3%, respectively.
PETALING JAYA: CIMB Research expects YTL Power International Bhd
’s earnings to get a boost from the higher water tariff rates applicable by its subsidiary, Wessex Water, in the United Kingdom but offset by weaker return from the power business in Singapore under Seraya Power.
The research house raised its estimates for YTL Power’s financial year 2026 (FY26) and FY27 core earning per share (EPS) by 5% and 3% respectively, to factor in the higher Wessex earnings contribution following the Water Services Regulation Authority’s final determination on water tariff rates for 2025 to 2030.
Wessex will be allowed to raise water tariff rates by as much as 21% over the period and the research house estimated Wessex’s net profit to turn around in FY25 to RM133mil and then jump to RM346mil and RM339mil in FY26 and FY27, respectively, owing to higher revenue and lower depreciation charges.
“Post-revision, we expect YTL Power’s core EPS to fall by 11% year-on-year (y-o-y) in FY25, driven by Seraya, before rebounding 29% and 17% y-o-y in FY26 and FY27, respectively, to new record highs as data centre (DC) earnings start to contribute materially from FY26,” CIMB Research stated in its latest report on YTL Power.
It maintained its “buy” call on YTL Power and raised its target price by 4% to RM5.20 a share (from RM5), after raising Wessex fair value per share of 79 sen from 59 sen previously.
On the issue of getting graphic processing unit chips for its proposed artificial intelligence (AI) DC in Johor, the research house is confident YTL Power will be able to attain national validated end-user status necessary to have access to the ship as the offtakers for its AI DCs are US-based hyperscalers.
“We have factored in cumulative deliveries of 12,000 GB200 Blackwell graphic processing units (GPU) in mid-2025, 36,000 at end of the year and 60,000 at end of 2026,” it added.
In case of delays in GPU deliveries and lower AI DC take-up and lease prices, CIMB Research put the fair value of YTL Power at RM3.79 a share, a valuation which excludes contribution from the AI DC segment.
