YTLPOWR / 6742 - 2010 Q2

YTL POWER INTERNATIONAL BERHAD

Listing Date: 23.05.1997
IPO Price: 2.700
Market: MAIN
Sector: INFRASTRUCTURE
Par Value: 0.50
Major Industry: Utilities
Sub Industry: Electric Power Companies

YTL POWER INTERNATIONAL BERHAD is an investment holding company that provides administrative and technical support services to its subsidiaries. The Company operates in three business segments: investment holding, power generation and sale of electricity and sales of water and disposal of waste water. Its subsidiaries are engaged in the provision of wire line and wireless broadband access and other related services; developing, constructing, completing, maintaining and operating power plants, and sale of electricity. On June 18, 2009, the Company acquired a 60% interest in YTL Communications Sdn Bhd. They provide operating energy facilities and undertake oil trading activities and provide wire line and wireless broadband access respectively. In September 2009, the Company incorporated YTL DCS Pte Ltd. On February 18, 2010, the Company incorporated YTL Utilities Finance 5 Limited (YTLUF5) and YTL Communications International Limited.

My TP: 2.28+0.15=2.43 (PE 16, EPS 0.1424, DPS 0.15), 10.45% price increase from current price 2.2
My decison: BUY
Reason: Undervalue, profit growth, strong cash flow, high dividend (6.82%)

My study based on 2010 Q2 report (number in '000):
- Comapre to last year, the increase of revenue and profit principally due to consolidation of the financial result of PowerSeraya, a wholly owned subsidiary which was acquired on 6 March 2009
- Compare to preceding quarter, increase in profit principally due to better performance in multi utilities business (merchant) segment of the Group
- Estimate next 4Q eps after 2010 Q2 result announced = 0.0356*4 = 0.1424, estimate PE on current price 2.2 = 14.4(DPS 0.15)
- Estimate next 4Q eps after 2010 Q1 result announced = 0.0328*4 = 0.1312, estimate highest/lowest PE = 16.23/15.02 (DPS 0.15)
- No Estimate next 4Q eps after 2009 Q4 result announced
- Estimate next 4Q eps after 2009 Q3 result announced = 0.0335*4 = 0.134, estimate highest/lowest PE = 15.45/14.48 (DPS 0.15)
- Estimate next 4Q eps after 2009 Q2 result announced = 0.0334*4 = 0.1336, estimate highest/lowest PE = 14.6/12.72 (DPS 0.15)