Due to repeated optimism from brokerage firms, Yang Zhongli's institutional stock price has broken a new high

Following the release of Hong Leong Investment Bank's optimistic report, Yang Zhongli's agency received incentives today and its stock price broke a new high. The stock price rose 6 cents or 2.21% throughout the day, and the closing report was RM2.77.

“In particular, Yang Zhongli Electric Power, Yang Zhongli's agency will rely heavily on this 55.6% subsidiary to achieve outstanding results.”

He said that Yang Zhongli Electric Power delivered strong profit performance in the past few quarters, thanks to the contribution of Singaporean subsidiary SerayaPower.

“SerayaPower and the Jordanian affiliate Attarat power plant are expected to maintain a steady profit contribution.”

Meanwhile, analysts said that its British water subsidiary, WessexWater, is expected to turn a loss into a profit starting at the end of the current fiscal year, which will further boost the future profit performance of Yang Zhongli's utilities.

The newly emerging data center business is also viewed by analysts as one of Yang Zhongli's future growth drivers.

He added that given Yang Zhongli's strong financial position, the company should be Nvidia's partner in Southeast Asia expansion plans.

Furthermore, the analyst pointed out that as the construction industry picks up, Yang Zhongli's agency is expected to receive construction orders worth about RM1 billion in the short term from projects such as the AI data center, the 500 MW data center solar power generation facility, and the 600 MW new circulating gas turbine (CCGT) power plant in Singapore.

“Other potential large-scale projects that Yang Zhongli's agency can pursue include the Longxin High Speed Rail (HSR) and MRT Line 3 (MRT3).”

In any case, analysts believe that although the construction business brings overall synergy benefits, it is not the main source of profit for Yang Zhongli's agency; it is estimated that it will only account for 1 to 2% of future profits.

Furthermore, with favorable coal cost trends and the average price of ash remaining at a healthy RM380 per ton, analysts believe that Yang Zhongli's institutional ash business can maintain a high level of profit in the short term.

Although analysts did not give Yang Zhongli's agency any ratings, considering the strong profit prospects, he raised the stock's reasonable price from RM2.10 to RM3.33.