FIGURE 1: YTL POWER
INTERNATIONAL BERHAD LAST 5 YEARS SHARE PRICE TREND
**analysis
based on 2020 annual report.
1.
GENERAL
INTRO: The core business includes Power Generation (Contracted), Multi
Utilities Business (Merchant), Water & Sewerage, Telecommunications
Business and Investment Holding Activities.
2.
NOTABLE
POINTS:
a. YTL
Power generates most of its revenue by selling electricity, particularly in
Singapore. The company’s water and sewage services company also contributes
significant revenue.
b. During
the COVID-19 pandemic, YTL Power's utility businesses were not significantly
affected and continue to provide essential services such as water and sewerage
services in the United Kingdom, power generation, transmission and other
multi-utility services in Malaysia, Singapore, Indonesia and Australia.
c. In
FY2020, YTL Power declared a distribution of 1 treasury share for every 16
ordinary shares representing a yield of approximately 6.3% based on the average
share price for the financial year of RM0.67 per share. YTL Power has a
consistent dividend track record and has declared dividends to shareholders for
23 consecutive years since listing on the Kuala Lumpur stock exchange in 1997.
d. The
majority of the Group's revenue is from Singapore (54%), followed by UK (33%)
and Malaysia (10%). By segment wise, most of YTL Power's revenue is from its
Multi Utilities Business (54%), followed by its Water & Sewerage business
(32%).
e. Profit
before taxation for the current financial year under review decreased to
RM425.2 million compared to RM753.4 million recorded in the previous financial
year. The lower profit before taxation was principally due to lower profit
recorded in the Water & Sewerage segment and the loss recorded in the
Telecommunications Business segment, partially offset by better performance in
Multi Utilities Business (Merchant) segment.
3.
IS
THIS COUNTER A STRONG GROWTH STOCK?
a. REVENUE
RANGE (RM million): 10637.1 million as reported in 2020 annual report, this is
a high revenue company.
b. SHARE
PRICE: from 2016-2020, share price decreased from around RM1.50 to current
level of around RM0.65.
c. EARNING
PER SHARE (EPS): earning per share in last 5 years was overall decreasing, from
14.06 to 0.88 sen
d. PRICE
TO EARNINGS (P/E) RATIO: current P/E ratio is very at 73.21, indicating the
share price is overpriced
e. FUTURE
POTENTIAL/PROSPECTS: share price expect to be stable in the next few years
f.
CAPITAL EXPENDITURE (CAPEX): spending on
purchase of new fixed assets and other investments amount to about RM 1556.2
million, which is around 3.3% of total assets.
4.
IS
THIS A STRONG DIVIDEND STOCK?
a. DIVIDEND
YIELD: in 2020 financial year, YTL POWER did not declare a dividend payout to
shareholders, instead, a dividend share was issued.
b. DIVIDEND
PAYOUT RATIO: N/A.
c. CONSISTENCY:
the dividend payout was consistent except for FY2020, the dividend paid to
shareholders in the last five years ranged from 5 to 10 sen.
5.
IS
THE MANAGEMENT PERFORMANCE GOOD?
a. RETURN
ON EQUITY (ROE): in 2020 financial year, YTL POWER reported a low return of
shareholders’ equity, at 0.58%.
b. COST-TO-INCOME
RATIO: cost-to-income ratio is very high, at 2402%.
6.
OTHER
INDICATORS:
a. CASH
FLOW: cash flow is positive, around RM 6923.5 million, equivalent to RM 0.90 per
share.
b.
SUPPORT BY INSTITUTIONAL INVESTORS: this counter
is very well supported by institutional investors, there are 22 institutional
investors at top 30 major shareholders list, including EPF (5.8%), SKIM AMANAH
SAHAM BUMIPUTERA (3.85%) and insurance companies/investment funds. Its major
shareholders are YTL Corporation Berhad (48.76%) and Yeoh Tiong Lay & Sons
Holdings Sdn Bhd (9.85%).
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