YTL, a prominent Malaysian infrastructure conglomerate, experienced a substantial rise in its second-quarter profit, sparking an 8.8% surge in its stock price to 2.34 ringgit on Friday. This upsurge contributed to a year-to-date gain of 24% as YTL's share price quadrupled over the past year.

Factors Driving Growth

The impressive financial performance was driven by YTL's utilities unit, which showcased a robust earnings outlook fueled by its enhanced overseas operations and benefits from collaboration with chip giant Nvidia on an artificial-intelligence infrastructure project. As a result, net profit for the three months ended December soared to MYR589.2 million ($123.3 million) from MYR96.9 million in the previous year, supported by solid results from listed units YTL Power International and Malayan Cement. Furthermore, quarterly revenue climbed by 14% to MYR7.53 billion.

Analyst Insights

Following the remarkable results, CGS-CIMB adjusted its fiscal 2024-2026 earnings-per-share forecasts for YTL, showcasing an increase of 2%-57% due to higher expected utility and construction earnings from upcoming infrastructure projects. The brokerage also revised the target price for the stock to MYR3.00 from MYR2.13 while maintaining an add rating.

Analyst Chong Tjen-San noted that YTL, with its diversified exposure, could potentially act as a proxy for Malaysia's benchmark Kuala Lumpur Composite Index and the MSCI Malaysia Index.

Positive Outlook

MIDF Research shares a bullish sentiment towards YTL's earnings outlook for its power and building-material units, resulting in a target price adjustment to MYR2.27 from MYR1.78 while keeping a buy rating on the stock.

For more updates on YTL's performance and market insights, stay tuned for further reports.

Leave Comment