YTL - Personal Analysis 1/10/2013

Personal Technical Analysis
1st Oct 2013

Currently supported at RM1.51, its 1-year low.
Fast STO shows that it is oversold.
MACD is slightly above Signal Line but is below the Centerline.
Critical support line: RM1.51
Immediate resistance line: RM1.55

My call: Sell for closing below RM1.51.

High-speed rail tender may start year-end

From Business Times

11th July 2013

KL-SINGAPORE LINK: Proof that the 400km rail project is viable, say sources.

THE government may call for an international open tender for the high-speed rail (HSR) link between Kuala Lumpur and Singapore by the end of this year.

This indicates that the 400km project is viable, said people with first-hand knowledge of the matter.

The Land Public Transport Commission (SPAD) has been carrying out a feasibility study on the HSR project since early last year.

The study includes a detailed assessment on the technical and engineering aspects, cost, financial and operations, and economic benefit of the project.

Minister in the Prime Minister's Department Nancy Shukri said on Tuesday the government is finalising details of the technical engineering and feasibility study, adding that a full report is expected by the end of this month.

The project, which was agreed in principle between Malaysia and Singapore in February this year, is targeted for completion by 2020.

The rail link is expected to cost around RM40 billion. This includes RM10 billion to buy high-speed bullet trains.

According to sources, there will be mandatory requirements in the tender procurement that companies must meet before they can make a bid.

These include having a few years of expertise in running high-speed trains and operating railway lines, a source said.

"The other considerations would include transfer of technology, the type of systems used and costs. The government expects train manufacturers from Europe or China to be among the key players," the source said.

Business Times reported recently that several local and foreign firms are in talks to form consortiums.

MMC Corp Bhd may team up with Gamuda Bhd and Chinese and European system integrators.

YTL Corp Bhd, controlled by Tan Sri Francis Yeoh, may bid for the HSR project with Spanish bullet train maker Talgo or CAF.

UEM Group Bhd, meanwhile, is working with Ara Group, founded by Tan Sri Ravindran Menon, to form a consortium with European companies that may also include Talgo.

Global Rail, a railway engineering firm owned by Fan Boon Heng, is talking to Canada's Bombardier Inc and Chinese firm China Railway Group.

[Source]

 

Time not right to delist YTL's power unit

From Star Online: Business
18th Dec 2012

PETALING JAYA: YTL Corp Bhd may have to wait a bit longer before making an offer to take listed subsidiary YTL Power International Bhd private, as the former's share price has come off quite a bit in recent months.

Most analysts believe YTL Corp would take YTL Power private via a share swap, as had happened with YTL Cement Bhd in February, because this would enable the Yeoh family, which has a 55% stake in YTL Corp, to preserve their cashflow and stake at the group level.

YTL Corp's share price has fallen 12.74% to RM1.85 since its June 20 peak this year.

YTL set to be major dividend player

By Star Online: Business
2 June 2012

YTL Corp Bhd is positioning itself to become a major dividend player following changes in the diversified group's structure.

“The structure has changed, we've privatised YTL Cement, that's been successful as the parent company, YTL Corp should pay the most in dividends from now on,” managing director Tan Sri Francis Yeoh Sock Ping tells StarBizWeek in an interview.

“Prior to this, we have been paying almost nothing, maybe about 1% yield, ” Yeoh says.

Yeoh: ‘It’s only right that as the parent, we pay the most in dividends among our stable of companies.’

YTL has businesses in an array of sectors including utilities, cement, property, real estate investment, hotels and technology.

By privatising its cement unit, YTL Corp will get a direct sizeable operating business in cement with full access to its net income and cash flows, Yeoh points out.

About RM165mil is expected to be added to YTL Corp's estimated net profit this year from the cement business.

This will automatically enhance YTL Corp's ability to increase dividends.

Earlier this week, YTL Corp announced that it would reward shareholders with treasury shares as part of a dividend payout and would also sell its warrants in another one of its subsidiaries, YTL Power International Bhd at a discount.

The company intends to give away one treasury share for every 15 YTL Corp ordinary shares held.

This share dividend and the proposed offer for sale of warrants coupled with an interim cash dividend of 2 sen per share declared last week, would result in a gross yield for YTL Corp's shareholders of 13.7 sen per share or 7.88% based on the prevailing 5-day market price of RM1.74 per YTL Corp share and RM1.66 per YTL Power share.

“YTL Power pays about a 5% yield, we think it's only right that as the parent, we pay the most in dividends among our stable of companies,” Yeoh says.

YTL Corp's net profit increased 17% to RM364.8mil in its latest quarter ended Jan 31 while revenue stood at some RM5.2bil.

Including YTL Corp, the other three listed entities in the group are YTL Land and Development Bhd, YTL E-Solutions Bhd and YTL Power.

Continuing to expand

“We have about RM14bil cash and are prepared to expand,” Yeoh says.

YTL Corp is used to having a lot of very good business expansion activities every time there is an economic downturn, for example our acquisition of the Hilton Niseko in Japan in 2008, he says.

“The market tends to be overpriced, always too ahead of the curve in buoyant times.

“As patient investors in infrastructure, we always look for a certain internal rate of return, you have to be very patient to get that,” Yeoh says, adding that YTL found good-value assets during times of economic implosion and adjustments.

He counts among such assets, British water utility Wessex Water which was bought from Enron Corp in 2002 for US$1.77bil and Singaporean independent power company PowerSeraya Ltd for S$3.8bil in 2008.

“By the end of this year, we will probably have sales of RM20bil, I think that's the most sizeable turnover for a private company other than Khazanah Nasional-linked companies, so you can see we have grown and are continuing to grow,” he says.

The current RM14bil has “not been put to work” but YTL Corp is looking and have identified some assets, especially in the area of hospitality and retail , Yeoh enthuses.

“Having said that, we are already pouring more money into our cement business, we are going to increase (production) and in two and a half years from now, we are going to add some RM600mil sales and RM200mil profit to the cement division,” he says.

Likewise in terms of mergers and acquisitions (M&A), YTL Corp recently acquired three hotels in Melbourne, Sydney and Brisbane respectively.

“If before we were chasing people for deals, now we are being chased as people are beginning to let go of assets at more realistic prices in view of the global economic problems.

“If they are looking to sell, they have to give potential buyers more realistic yields. We are seeing double-digit yields in hotels in Australia,” Yeoh says.

“China is crumbling a bit too now... we are beginning to see people chasing us there too, China is an interesting space to watch ” he adds.

[Source]