YTL Power's AI compute could lift FY26 earnings by 4pct
Maybank Investment Bank Bhd (Maybank IB) expects this to drive a potential net profit increase of around four per cent in financial year 2026 (FY26) and six per cent in FY27.
The firm continues to view YTL Power's risk-reward profile positively, especially given its undemanding valuations.
This optimism is supported by the anticipated confirmation of Wessex's medium-term recovery as well as encouraging progress in its data centre and AI compute business.
Maybank IB maintained a 'Buy' rating on YTL Power with an unchanged target price of RM4.20. Based on news reports, it said the group's AI compute business is on track to go live in 3Q25.
"While substantially more capital expenditure intensive on a per megawatt (MW) basis, the gestation period is likely minimal, unlike data centre colocation, because graphic processing units, which are the biggest cost item, are typically only procured after securing off-takers.
"Thus, upon commissioning, AI compute is likely to be immediately earnings accretive to YTL Power, in our view," it added.
Assuming a 20MW deployment as planned, Maybank IB said YTL Power could incur about RM2.1 billion in capital expenditure, which could, in turn, generate around RM130 million in profit after tax annually.
It said a 3Q25 launch for the initial 20MW would allow AI compute to contribute at least three quarters to YTL Power's FY26, potentially lifting its net profit forecasts by about four per cent and six per cent for FY26 and FY27, respectively.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
12 hours ago
- New Straits Times
Velesto set for stronger 2H25 as rig utilisation rises
KUALA LUMPUR: Velesto Energy Bhd is poised for stronger earnings visibility for the remainder of the year as five out of its six jack-up drilling rigs have secured contracts, according to Maybank Investment Bank (Maybank IB). The firm raised its financial year 2025 (FY25) earnings forecast by three per cent to account for a higher blended utilisation rate assumption of 72 per cent since the Naga 5 rig started work one month earlier than scheduled. While second quarter (2Q25) results may be weaker on a quarterly basis due to scheduled maintenance for two rigs and slightly lower average daily charter rates (DCRs), Maybank IB expects earnings to be backloaded in the second half. The firm projects a strong recovery with utilisation rates at 83 per cent for both the third and fourth quarters. Maybank IB said Velesto's earnings peaked in FY24 in line with the local oil and gas services and equipment sector cycle. "Earnings will likely decline annually, but the company should remain comfortably profitable. Despite lower DCRs from the peak, its rigs are well-utilised, providing Velesto with cash flow comfort," it said. As at end-March 2025, due to strong operating cash flows from its drilling operations, Velesto's net cash position grew by 60 per cent on a quarterly basis to RM104.7 million. This represents about seven per cent of Velesto's current market capitalisation. "With a healthier balance sheet ahead, we raise our dividend payout ratio assumption to 100 per cent from 70 per cent previously, translating into a dividend per share of 2.1 sen and an attractive yield of over 11 per cent," Maybank IB added. The firm said Velesto's drilling operations also benefit from a natural hedge against foreign exchange fluctuations as about 70 per cent of its operating and capital expenditures are denominated in US dollars. Maybank IB kept its "Buy" call on Velesto with a target price of 18 sen.
Malay Mail
14 hours ago
- Malay Mail
Malaysia to build RM10b green AI hub with Nvidia, YTL Power in regional tech push
KUALA LUMPUR, July 27 — Malaysia is poised to emerge as a regional hub and centre of excellence for artificial intelligence (AI) in Asean following the signing of a strategic partnership between Nvidia Corporation and YTL Power International Bhd. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the agreement aims to develop AI infrastructure powered by green energy in Malaysia, backed by an investment worth RM10 billion. 'This landmark project includes the development of AI data centres, deployment of Nvidia's high-performance graphics processing units (GPUs), and most importantly, the creation of Malaysia's own sovereign large language model (LLM),' he said in a post on social media platform X today. YTL Power is a subsidiary of YTL Corporation Bhd. Tengku Zafrul added that YTL will also build an AI ecosystem in collaboration with technology partners, suppliers and local contractors. He said the partnership also reflects the tangible outcomes of Prime Minister Datuk Seri Anwar Ibrahim's international engagements, laying the groundwork for investments that could reshape the nation's economic and technological landscape. In December 2023, Anwar met with Nvidia Corporation Chief Executive Officer Jensen Huang and YTL Power Managing Director Datuk Yeoh Seok Hong. — Bernama
Barnama
a day ago
- Barnama
NVIDIA-YTL Power Deal To Boost Malaysia As ASEAN AI Hub
KUALA LUMPUR, July 26 (Bernama) -- Malaysia is poised to emerge as a regional hub and centre of excellence for artificial intelligence (AI) in ASEAN following the signing of a strategic partnership between NVIDIA Corporation and YTL Power International Bhd. Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz said the agreement aims to develop AI infrastructure powered by green energy in Malaysia, backed by an investment worth RM10 billion. 'This landmark project includes the development of AI data centres, deployment of NVIDIA's high-performance graphics processing units (GPUs), and most importantly, the creation of Malaysia's own sovereign large language model (LLM),' he said in a post on social media platform X today.
