Read it in one of the articles when the Senoko Power deal was in progress. Temasek has 3 power generation facilities(gencos) it wants to sell, and so far they have sold Tuas Power to a China company, the recent Senoko Power to a Japanese Consortium and their last one is Power Seraya which is planned to be sold before end of 2009.

I believe Tanjong was one of the un-successful bidders of the Tuas Power and YTLPOWER is the un-succesful bidder of Senoko Power. Power Seraya will be their last chance in Singapore. A very rare chance to hold some utilities in Singapore.

This would be extremely rare. The only case I could think of that happening was when Multipurpose bought controlling stake of Magnum so it can give itself large dividend payouts from Magnums cashpile. But then MultiPurpose was already a major shareholder.

Very rarely would a company flushed with cash be taken over by another cash-strapped company with a good 'idea'. More likely the cash rich one will buy-over the 'innovative' company as a subsidiary and sponsors it's ideas.

Share dividend ex-date is it?

Can't agree with the statement because it does not make sense.

The benefits of having a large pile of cash is the ability to acquire or buyout any company that offers a good return. Using the cash for not so good deals are really not very convincing of a capable boardroom. Like the recent Maybank acquisition which drew flak from investors.

Like Warren Buffett says, "I rather buy a wonderful company for a fair price than buying a fair company at a wonderful price".

Awesome news indeed.

a) I think they have already RM9 bil in hand. Too bad the Singapore acquisition didn't go through.

b) I doubt the Olympics will have any significant economic impact on the UK. Since most of their infrastructure is already in place. Tourists arrivals will no doubt surge during the Olympic season but will be considered something very short term rather than long term. Meaning no new businesses will be created due to Olympics because the businesses that needs to be there are already there. Their retails business will see some boom during Olympics but then it'll be just like an additional Christmas Season for the year, nothing more. So I doubt the pound would have any effect due to Olympics.

You mean buying YTLPOWER shares as a proxy for overseas investments? Hmm interesting way to look at it, but I'm not all to familiar how the forex would react in the near future but am interested in keeping ahead of the fall in RM by keeping SG dollars and possibly other currencies.

Edit: And yeah, I believe the support would be at RM1.60-RM1.65.

This post has been edited by skiddtrader: Sep 15 2008, 12:48 PM

Wouldn't move much from here since it has already fallen quite a lot since last year.

Don't forget though that next quarter results will show the windfall tax payment and will affect their nett profits.

The bonds should be reflected under long-term liabilities.

For the cash from warrant conversion, these will reflect as financial activities of the cash flow report. Not very sure how the balance sheet will report, could be cash will be in assets and the other side would be balance off under equities. Will need someone to clarify on this as well.

Heavy selling? Not really when you look at the volumes for the day. But the individual selldown of some 3000 lots and another 1000 lots is probably by EPF or something. Noticed there was a last minute large buy-in as well of 3500 lots, not in line with normal buy-back times.

When the times were bearish, it was holding quite steady. But when the windfall tax news came about, it was what broke the camel's back and send it downwards. Since then even though the windfall tax is discontinued, they still need to pay at least 1 years windfall tax for 2008.

Until the actual amount is known (no one knows for sure how much they paid), the share will continue to be like this until the announcement is made.

If you are expecting a sudden surge in the share price, it's better if you speculate on the WB warrants as the returns would be much better.

Actually RM91 mil is almost about 9% of YTLPOWER's Nett profit. That means if in 2007 their nett profit was RM1 bil, 2008 will be RM909 mil if the profits stays the same. But this RM91 mil is a ONE time event. It won't be recurring in 2009 unless the governement flips flops again.

Unfortunately this can't be reversed just of yet. No one knows whats the next step of taxes or PPA negotiations that will impact the financials. But definitely the current government now knows that simply announcing a new tax without even thinking it through will be subjected to more scrutiny.

But as darkknight81 has said, YTLPOWER's strenght is it's resilience during downturns because of it's dividends and utilities steady business. As I've always said, if you think the share is going to go up soon, buy the WB warrants instead of mother share for maximum returns. If you're aiming for steady dividends then go for mother share. Balance both in your portfolio if you wish to experience both kind of returns.

This post has been edited by skiddtrader: Oct 2 2008, 11:30 AM

YTLPOWER's latest EPS is 19.97 cents. At the current price of Rm1.77, the PER is 8.86x excluding dilution from future warrant conversion.

YTL's latest EPS is 56.5 cents. At current price of RM6.15, the PER is 10.88x excluding dilution from future warrant conversion.


YTL owns about 60% of YTLPOWER + other subsidiaries such as YTLCEMENT, YTLLAND and YTLE-Solutions.

Bulk of YTL's value is derived from YTLPOWER's asset, including assets + liabilities.

So when you look at YTL's financial, it actually includes YTLPOWER + all the other subsidiaries which are listed + those which are not listed.


And also regarding prices of share, it depends on how many shares the company has in total. YTLPOWER has about 6 billion shares now while YTL only has about 1.5 billion.

If you take the profits for both companies and divide it by the number of shares they have, you will arrive at their EPS.

Their share price divided by their EPS will be their PER or price earning ratio, which is commonly used to determine how expensive or cheap a stock is. Never look at a share price to decide whether a company is cheap or not because it's like comparing a $10k BMW car vs a $10k t-shirt. Both are priced the same, but the value you get is different.

Learn more on how to evaluate companies at Investopedia

Comparing the PER of both companies will be like comparing apples/oranges because of their different sectors. Although YTLPOWER's is part of YTL corp, they still have plenty of other businesses.

In the case of PER, different sectors has their different average PER. Like steel counters normally have a lower PER compared to tech counters. So if you want to compare PER, you have to find an equivalent comparison for YTLPOWER. Normally should be able to find other counters under the utilities section like MMC which owns Malakoff IPP, Tanjong (also a consortium like YTL), SARAWAK power and etc.

Also try to be aware under stable market conditions the PER is different from when the market is bullish or bearish. Normally PER plays an important role when you find the counter falls or rises significantly during bull or bear periods. The normalised or rather 'stable PER' can then be used as reference to see if it is really over-valued or under-valued. It is useless to use a bull-market PER and then compare it with a Bear market PER and claims the counter is very CHEAP.

For YTLPOWER's case, I would say under such bearish conditions and the controversial IPP windfall tax, it beat the stock down pretty much from it's above RM2 range to the current below RM1.8 range. I was expecting the counter to hold well above RM2 after the ex-date of their massive WB warrant issue but the IPP tax issue pushed it down further.

PER as far as I know is always changing depending on share price, so there are no known record of the PER unless it is recorded for a specific day.

Since PER is based upon the quarterly updated EPS and everchanging share prices, the EPS is the constant and should be used as reference every quarter to calculate the PER. Don't forget to annualised the quarterly EPS because the quarterly EPS is just for that quarter and PER is normally calculated by using the total EPS for the year.

Darkknight81,

I'm sure calmwater is just trying to show another angle of possible risks involve and he is more than welcome to join the discussion regarding how the currency may play part in future profits.

For me, the currency exchange rate is a none issue because Wessex is earning in pounds which you think might be affected but then their long term loans are also in pounds which is reduced whenever the exchange rate increases in favor of RM. So both negate each other in terms of currency exchange fluctuations.

For example, if 1 Pound increases back to RM 7, their profits might go up another RM 1 for every Pound they make, but then for every Pound they took in loans will also increase by RM 1 which would mean, their monthly payments would increase by RM 1 for every Pound they pay. So like I said, it is a none issue.

Unlike other companies such as TENAGA which took their loans in American Dollars but their operational revenue is in RM, the currency exchange rate affects their quarterly performance. Because if the exchange rate increase is faster than their revenue growth, sooner or later they will start making a loss and would need to re-finance their loans in another currency to hedge against the Dollar appreciation.

In the case of YTLPOWER, over time when the loans in Pound is repaid and reduced, the exchange rate will have a more significant role to play in their profits as there aren't anymore loans that hedge against it. But their long term loans I believe are stretched over 15 years or more, and will probably be re-financed again so this scenario is unlikely to happen although possible.

This post has been edited by skiddtrader: Oct 5 2008, 03:02 AM

Although in accounting this is good as when the debt is slowly cleared, the EPS should slowly improved as well as the debt payments are reduced. So it is correct to say that EPS will increase as debt is reduced if the net income is constant.

But in reality, companies who holds too much cash risks losing in terms of inflation in both normal and currency exchange. So their growth must increase substantially more than what the inflation eats.

YTLPOWER just issued a RM2.2 bil bond that has to be paid back within 5 years. They are preparing for an acquisition within these 5 years. On top of the bonds proceed, is the future capital injection of at least RM1.7 billion over the next 10 years from warrant WB conversions. I believe the capital injection from warrants is more to service their long term loans.


To espree,

The dividend percentage is 7.5% of the par value. So it's 7.5% of RM0.50 which comes up to RM0.0375 per share.


To rayloo,

The 40% surge is an extraordinary income in 2007. I forgot what it is already but it is not from their normal revenue.


To aeronyc,

Last quarterly report states that YTLPOWER has GBP 1.661 billion and USD 550 mil worth of debts.

So if GBP 1.661 bil * RM7 = RM 11.627 bil

If * RM 8 = RM 13.288 bil
If * RM 6 = RM 9.966 bil

USD550 mil * RM3.5 = RM 1.925 bil
If * RM 3.2 = RM 1.76 bil

The exchange rates differences are to reflect that major changes upwards will inflate their loans in RM, so a more stronger ringgit will actually reflect a lower debt amount in the accounts compared to a weaker RM.

Same like their profits,

Their last quarter results show that throughout the year, WW made about RM 1.404 bil profits. If you divide it by RM 7 to get it in GBP it would be about GBP 200.7 mil only.

For a GBP 200.7 mil profit a year, if the exchange rates were to imrove by 1 RM to GBP 1 = RM 8, the total profits in RM will be RM 1.605 bil or about RM 200 mil increase.
So the increase of RM 1 actually increase their profits in RM by 200 million, BUT it also increase their their debts by about RM 1.661 billion. Meaning also their monthly payments would actually be more in RM but eventually being same in GBP. This will mean their financial costs would increase proportionally with the increase in GBP against the RM. Which means it will also push the EPS down.

So now look at the figures and think about how high or low you want the RM to be against the GBP.

So which is why I think since they earn in GBP and took their loans in GBP, it doesn't actually affect their profit margins in GBP. It's just that their accounts that we see is in RM so meaning it will show some increase/decrease because of the currency exchange. In other words, only in the accounting books the value changes, but the actual business is not earning less/more in terms of currency exchange. So my advice is, stop worrying about it.

This post has been edited by skiddtrader: Oct 6 2008, 02:04 AM

Dividend announcement expected this month for this counter. Last quarter results stated board recommended a 7.5% of par value, I am hoping for more. The announcement should be out with the audited annual statement.

I read the recommendation in the quarterly results, and judging from their dividend history announcements, it should be in this month near the 20th or so.

The support for it is too strong for the share to drop another 20% for the WB to even reach that level, unless there is some kind of accounting problem or some scandal or an additional windfall tax. I highly doubt it can reach that level even if KLCI drops another 20% itself.



This post has been edited by skiddtrader: Oct 9 2008, 09:45 PM