**analysis
based on 2020 annual report.
1.
GENERAL
INTRO: The key reporting segments of YTL Corp and its subsidiaries are
Utilities, Cement Manufacturing & Trading, Construction, Property
Investment & Development, Hotel Operations, Management Services &
Others and Information Technology &
e-Commerce Related Business.
2.
NOTABLE
POINTS:
a. In
2020 report, YTL reported a 6% increase in revenue to RM19.2 billion for
financial year 2020, contributed mainly by their construction and cement
segments. The recorded profit before tax is RM637.9 million
b. The
Group has operations in Malaysia, UK and Singapore, as well as businesses and
projects under development in other countries including Indonesia, Australia,
Japan, Jordan and China. Majority of its revenue is derived from Malaysia
(39%), Singapore (36%) and UK (19%).
c. Its
utilities division was able to operate throughout the MCO period in 2020,
providing essential services including water, electricity and
telecommunications.
d. More
than 50% of revenue is contributed by the utilities segment, followed by the
cement, property and other segments.
e. For
the purpose of conserving cash to
provide increased flexibility and options to optimally manage their existing
businesses and invest in future opportunities, YTL Corp did not declare a
dividend in 2020. Instead, it declared a 1-for-30 share dividend. This is equivalent to a dividend yield of
about 3.3% based on the average share price for the year of RM0.89 per share. YTL
Corp has a consistent dividend track record and has declared dividends to
shareholders for 36 consecutive years since listing on the Kuala Lumpur stock
exchange in 1985.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (RM million): 19178.4 million as reported in 2020 annual report, this is
a very high revenue company.
b. SHARE
PRICE: from 2016-2020, share price dropped steadily from around RM1.50 to
current level of around RM0.70.
c. EARNING
PER SHARE (EPS): earning per share in last 5 years was overall decreasing, from
8.8 to -1.78 sen
d. FUTURE
POTENTIAL/PROSPECTS: share price expect to be stable in the next few years
e. CAPITAL
EXPENDITURE (CAPEX): spending on purchase of new fixed assets and other
investments amount to about RM 3231.2 million, which is around 4% of total
assets.
4.
IS
THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2020 financial year, YTL did not declare a dividend payout to
shareholders, instead it issued a 1 to 30 share dividend.
b. DIVIDEND
PAYOUT RATIO: N/A
c. CONSISTENCY:
the dividend payout was consistent except for FY 2020, the dividend paid to
shareholders in the last five years ranged from 4 to 9.5 sen.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2020 financial year, YTL reported a poor return of
shareholders’ equity, at -1.58%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is very high, at 4475%.
6.
OTHER
INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 11100 million, equivalent to RM 1.04 per
share.
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is well supported by institutional investors, there are 18 institutional
investors at top 30 major shareholders list, including EPF (5.82%) and insurance
companies/investment funds. Its major shareholder is Yeoh Tiong Lay & Sons
Holdings Sdn Bhd (44.17%).
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