YTL Power ~ A Low Risk & Sustainable Share?

YTLPOWR (6742) http://www.ytlpowerinternational.com/index.asp?catName=home

Background:

• YTL Power International Berhad is a subsidiary of YTL Corporation Berhad which is owned by, Tan Sri Dato' Seri (Dr.) Yeoh Tiong Lay, 6th richest guy in Malaysia net worth USD2.7billion and ranked 420 in the World Billionaires List provided by Forbes
• As of 31 August 2011, YTL Power International had a market capitalisation of USD4.6 billion (RM13.7 billion).
• YTL Power International listed on KLSE since 1997

YTL Power International



Current Share Price:  1.79

My View:

This share has drop around 31% from 2.60 since end of 2011.

The reasons I consider this share for investment are as follows:

• Value drop back to similar price (1.70) during the so called "Recession 2008". Since mid-2008, the price increased approx. 53% up to 2.60.
• Net asset per share is 1.18 ~ lower than current share price but stay steady between 0.98 to 1.26 since 2006.
• One of the major shareholder is EPF with approx. 9.92%

Long term cash flow:

• In Malaysia - The company owns and operates two gas-fired combined cycle power plants located in Paka, Terengganu, and Pasir Gudang, Johor, with a combined generation capacity of 1,212 MW. It supplies power to Tenaga Nasional Berhad, the national power company, under a 21-year power purchase agreement.
• In Malaysia - Through YTL Communications, they have introduced 4G technology.
• In Singapore - On 6 March 2009, YTL Power International acquired PowerSeraya Limited from Singapore's Temasek Holdings. PowerSeraya has a licenced generation capacity of 3,100 MW, making up about 25% of Singapore's total licenced capacity.
• In Indonesia - YTL Power International has a 35% stake in PT Jawa Power, which owns a 1,220 MW coal-fired power plant located at the Paiton Power Generation Complex in East Java, Indonesia. Jawa Power is the second largest IPP in Indonesia and has a 30-year PPA with PT PLN (Persero), the state-owned electric utility company.
• In Australia - YTL Power International has a 33.5% interest in ElectraNet, South Australia's major electricity transmission company, which owns and operates the state's power grid under a 200-year concession.
• In UK - Wessex Water, a wholly-owned subsidiary of YTL Power International, is a regional water and wastewater services company in the UK. Wessex Water serves an area encompassing 10,000 square kilometres in the south west of England, including Dorset, Somerset, Bristol, most of Wiltshire and parts of Gloucestershire and Hampshire. It supplies about 350 million litres of water to 1.3 million customers, and treats 490 million litres of sewage from 2.7 million customers daily.

This share provide dividends almost every quarter, last financial year total pay out for dividends approximately 5.24% which is higher than 3% interest per annum provided by banks for FD account.

Nowadays, we all rely on Electricity, Water, Internet etc. for our day to day life. Can we live without them?

To me this is a low risk & sustainable share which will give you the potential of 5% return per annum from dividends plus additional profit if the share goes up.

Enjoy in your investment!! ^_*