YTL Power retained its BUY rating from RHB Investment Bank (RHB), with a target price of RM6.68, indicating a potential 29% upside. RHB made a recent visit to Wessex Water in the UK where it reinforced positive sentiment, highlighting the company's strong operational performance and strategic responses to regulatory requirements, particularly in enhancing environmental sustainability and meeting long-term water demand.
Following the site visit to Wessex Water, which included meetings with management and a tour of key facilities, YTL Power is optimistic about the company's outlook. Wessex Water, known for its top-ranking performance in the water and sewerage sector, serves over 1.4 million people and thousands of businesses, demonstrating robust operational capabilities in water supply and wastewater treatment.
Wessex Water has submitted a substantial 5-year business proposal (2025-2030) to Ofwat, the water services regulation authority in the UK, seeking GBP3.5 billion in capital expenditure compared to the previous GBP1.4 billion. This increase is primarily aimed at meeting stringent legal and regulatory requirements focused on improving river health and sustainability, which could potentially raise average bills by approximately 30%. The decision on this proposal is expected by year-end, influencing future operational strategies.
With the UK experiencing more frequent extreme weather events, including water shortages, Wessex Water and government bodies are intensifying efforts to bolster water conservation and drought management strategies. Plans include converting Mendip quarries into potential reservoirs, a GBP1.1 billion project currently in development stages and awaiting final investment approval, to secure long-term water supply and environmental sustainability.
Maintaining a BUY recommendation, RHB's target price for YTL Power remains at MYR6.68, incorporating a 2% ESG discount based on its ESG score of 2.9 out of 4. The company's strategic initiatives in AI-data centre development further bolster long-term earnings potential, with immediate focus on finalising offtaker agreements for its initial 20MW AI-DC facility.
RHB Investment Bank维持YTL Power的 "买入 "评级,目标价为6.68令吉,表明其潜在上涨空间为29%。RHB最近访问了英国Wessex Water,这增强了积极情绪,突显了该公司强劲的运营业绩和对监管要求的战略回应,特别是在增强环境可持续性和满足长期用水需求方面。
YTL Power对Wessex Water进行了实地考察,包括与管理层会晤和参观关键设施,此后,YTL Power对公司的前景持乐观态度。Wessex Water以其在供水和污水处理领域的顶级表现而闻名,为超过140万人和数千家企业提供服务,表现出在供水和污水处理方面的强大运营能力。
Wessex Water已向英国水务监管机构Ofwat提交了一份为期5年的实质性商业提案(2025-2030年),要求将资本支出与之前的14英镑相比35英镑。这一增长主要旨在满足以改善河流健康和可持续性为重点的严格的法律和监管要求,这可能会使平均账单提高约30%。关于该提案的决定预计将在年底之前作出,这将影响未来的运营战略。
随着英国发生包括水资源短缺在内的极端天气事件更加频繁,Wessex Water和政府机构正在加紧努力,加强节水和干旱管理战略。计划包括将门迪普采石场改建为潜在的水库,该项目目前处于开发阶段,正在等待最终的投资批准,以确保长期供水和环境可持续性。
RHB维持买入建议,YTL Power的目标价格仍为6.68令吉,根据其ESG评分2.9分(满分4分),包括2%的ESG折扣。该公司在人工智能数据中心开发方面的战略举措进一步增强了长期盈利潜力,当务之急是敲定其最初的20兆瓦AI-DC设施的承购协议。