YTL Corp Growth Prospects

 YTL Corp (YTL) envisions good growth for the company for the current challenging  year of 2011.

 YTL Singapore Pte Ltd executive director, Ruth Yeoh Pei Cheen in an interview with BERNAMA expresses that YTL  will continue to perform good business.

YTL recently announced a 13.3 per cent growth in revenue to RM8.905 billion for the six months ended Dec 31, 2010 compared with RM7.857 billion in the previous corresponding period ended Dec 31, 2009.

The group’s utilities comprise power generation and transmission in Malaysia, Singapore, Indonesia and Australia, water and sewerage services in the United Kingdom, merchant multi-utility businesses in Singapore and communications in Malaysia.

Yeoh said the company also took to ensuring that all its businesses strived to preserve the environment. The companies have to send the sustainability report every year, she added.

When asked on new projects, the Director of International Real Estate of YTL Singapore, Kemmy Tan said the group was looking to develop its projects in Malaysia.

"We also bought the 460-hectare Niseko Village in Hokaido last year."

YTL Group MD Tan Sri Dr Francis Yeoh Sock Ping had announced YTL's master plan to re-energise the development of Niseko Village in Hokaido.

Targeting affluent individuals, Niseko Village will be transformed into an all-season mountain resort offering exclusive hotels, luxury homes, ski-in ski-out estates and exclusive shopping and dining, all with spectacular views of Mount Yotei (Ezo Fuji, the Mount Fuji of northern Japan).

Tan said the project is being managed by  the Singapore office.

In time to come, Tan said two projects in Singapore namely Sentosa Cove and the land in Orchard Boulevard will be streamlined into YTL Land.

The Japanese assets were acquired for about US$66 million while the Singapore project cost S$575 million, she disclosed.

The project in Singapore is in the planning stage and the launch could be probably next year.

So besides YTL, watch out for YTL Cement and now YTL Land!

Tracking YTL Corp Before Ex-Share Split

The upward trajectory price of YTL Corp(YTL) reversed today in tandem with  overall market sentiments hitting a low of RM7.78 and hovering at the price piece de resistance of RM7.80.

There is still 5 days to go before it exes. Looking at the trading numbers, most lots done are below 100 block lots. There were many blocks of 100 to 400 lots done at the RM7.78-RM7.79 level . Possibly from institutional buyers  getting a good bargain from traders who made profit during the last three trading days. The stock ended at RM7.79 sen for an 11 sen loss.

Let us see what happens the next few days.

I am not super optimistic but I believe my hunch is correct that it will go up before it cum split this Monday 25th April or ex-split on Tuesday 26 April.

YTL had huge block buying interests up to 1000 lot I think the institutional investors have come in pre-share split. The share price closed at RM7.81 for a 4 sen loss.

Let us see what a dull Friday will do to YTL tomorrow (22April 2011).

Pumping Up YTL Corp

At the last AGM in late November 2010, MD Francis Yeoh advised shareholders not to sell off their YTL Corp (YTL) shares . The AGM attendees were told that the YTL shares were undervalued. Definite plans will definitely afoot to realise the real value of  YTL shares.

There was speculation galore in the street rumours as well as market punters on how Francis will shore up prices.Some thought YTL will be considering strategic M&As buy-ins. Yet, until the EGM on 14 April, there  not a squeak from Francis. So what gives?

Every one knew that YTL has one of the biggest cash horde on this side of the  non-GLC corporate world. At that time, its cash reserves was a whopping RM10 billion, far more than Genting Malaysia's RM 2 billion.

At the EGM, Francis informs the meeting that now their cash reserves have gone up to RM12 billion! He added that the last two years were not good years for M&As. And most offers were too expensive to consider. If none appears on the horizon soon, YTL may just consider buying up more shares in its own strategic subsidiary, YTL Cement which is moving very close to the RM5 market price.

After long month of dull and listless trading, YTL shares finally rested at the RM7.20 price level for the issue of the share-split documents to its shareholders.For every existing RM50 sen share, 5 sub-divided shares at RM0.10 will be issued. This puts the ex-price of YTL at RM1.42 per share.

On 26 April 2011, YTL shares will be traded ex-split offer. The last date of lodgement is 28 April 2011.

As such, all shareholders will have YTL new shares deposited in their CDS account on 29 April 2011. However, those who want can start selling their new shares beginning 26 April 2011.

Here is an example taken from its announcement to Bursa.

"For example, if Mr X purchases 100 YTL shares on cum basis on 25 April 2011, Mr X should receive 100
shares on 28 April 2011. As a result of the share split, 500 YTL shares will be credited into Mr X's CDS
account on the night of 28 April 2011 being the Book Closing Date. Therefore, Mr X can sell the share
split shares of 500 on or after the Ex-Date ie from 26 April 2011 onwards."

Last Thursday when it held its EGM, YTL shares moved up 20 sen to RM7.45. On Friday which is a dull listless days on most markets, YTL bucked the trend to settle down at RM7.72 for another 27 sen gain. Now that the date of the ex-split is out, there is buying pressure to grab the mother share. It went up as high as RM7.99 in the first hour of trading this morning and settled at RM7.94 for another 22 sen gain.

From the buying pattern, it looks like either big funds are not here or they are taking small bites before the shares go ex. I believe the current 2.263 million shares traded today are mostly from small retail players except for a few chunks of shares at 300 lots and one 500  possibly coming from institutional investors.

The counter closed at RM7.90 for an 18 sen gain.

My Take:

I believe that YTL shares are under valued. I believe it is tightly held. I do not know who is throwing out the shares just before its ex date.

But I can foresee one scenario. It the shares go beyond the psychological RM8.00 mark, many local fund managers will move in. I believe long term investors such as PNB, Khazanah, EPF, SOSCO, and the Pension Funds are getting in now. If foreign funds should come in, do not be surprised to see YTL shares shooting past RM2.00 ex.

It will certainly pump up the fever and the pressure when feeding frenzy starts. By then it may just be too late to get premium profits.

You know what I mean?

More Buy-backs into YTL Cement?

YTL Corp Bhd may choose to buy subsidiary YTL Cement Bhd if there are not many attractive merger and acquisition (M&A) opportunities in the market, says an analyst.

“The group might be eyeing YTL Cement because of the low liquidity,” she told StarBizWeek yesterday. YTL Corp has a 50.1% stake in YTL Cement.

YTL Corp’s  Francis Yeoh had said that if there is nothing attractive, they may buy more into their own subsidiaries with some of the war chest cash reserve of RM12 billion.

YTL Corp is focussing on purchasing businesses of the infrastructure-type like water, electricity and transport and expanding its cement footprint.

Other subsidiaries under the group include YTL Land & Development Bhd and YTL Power Power Int Bhd.
At the EGM, the group said it was eyeing “sizeable acquisitions” as subsidiaries under the YTL group had restructured their balance sheets and were now “strong enough” to pay out consistent and substantial dividends.

Yeoh said the amount would be as much as RM1bil in dividends from its subsidiaries for its current financial year ending June 30, 2011.

“YTL Corp will be able to get RM1bil per year from now from our subsidiaries. With the restructuring and dividends, we can easily look at sizeable M&A opportunities,” he said.

YTL Cement, commanding about 30% of market share, is the second largest cement manufacturer in Malaysia after Lafarge Malayan Cement Bhd.

YTL-The RM 12 Billion War Chest

If there is any share worth considering now on the Bursa, it must be YTL Corp.For one, it has a cash horde in reserve even bigger then Genting Malaysia! Imagine RM12 billion for M&A and focusing on strategic buys globally! MD Francis Yeoh termed these as 'sizeable acquisitions' in infrastructure-related business.

Francis added that subsidiaries under the YTL group had restructured their balance sheets and were now “strong enough” to pay out consistent and substantial dividends. In fact, it is waiting for a whopping RM1 billion just from dividends alone from its subsidiaries for the year ending June 30, 2011.

“YTL Corp will be able to get RM1bil per year from now from our subsidiaries. With the restructuring and dividends, we can easily look at sizeable M&A (mergers and acquisitions) opportunities,” he told reporters after the company EGM yesterday.

Yeoh said YTL Corp would be eyeing acquisitions primarily in water, electricity and transportation-related businesses.

“We will concentrate on those kinds of businesses that we’re familiar with. We will also be expanding our cement footprint,” he said, adding that YTL Corp had an (unencumbered) cash level of RM12bil that it could utilise for acquisition purposes.

According to Yeoh, the YTL group had intentionally backed off from M&As from 2008 to 2010.

“From 2008 to 2010, there was a lot of liquidity in the stock market and commodities but everything was overpriced and (it was) very difficult to put our money to work and get reasonable returns.

“To me, deals were not rightly priced in terms of returns of interests, so that explains the lack of big M&A opportunities from 2008 to 2010.” He added that the group had been seeing “very interesting deals that can be considered in every area of our business.”

“We expect (unit) YTL Construction to be very busy now with the ETP (Economic Transformation Programme),” said Yeoh.

So, I think YTL will fetch a very good price when it converts into 10 sen share comes 26 April 2011. Going by my estimation, at today's price of RM7.70, it should work out to RM1.54 per lot.

I can easily see the share moving past RM 2.00 in no time.

PS: On 29 April, YTL shares was just hovering about RM1.66, short of 34 sen to the possible target of RM2.00.

Different Perspectives

People can be mighty perceptive. Look at these two items. They have projected their own 'mind colour' to its meaning.

Biting Excitement at BJFoods!

It looks like this counter has suddenly catapulted out of its earlier doldrums.

From a high of 74.5 sen, it has backtracked and then somersaulted to new highs on heavy volumes of more than 30 to 60 million shares daily. No doubt day traders has helped. There seems to be genuine medium term investors buying into the counter. I suspect the main bulk could be Berjaya-led investing units chiefly BJCorp and Berjaya Sompo after relieving their stakes in BJRetail through market sales.

It has now touched 84 sen. Let us see what new price it will rest at before retracing or moving forward.