RHB Investment Bank has reaffirmed its BUY rating on YTL Power International Berhad (YTLP), raising its target price to RM4.90 (from RM4.77). The upgrade reflects a massive 53% potential upside, fueled by a surge in data center capacity and stable earnings from its utility businesses in Singapore and the United Kingdom.
Data Center Milestone: 110MW Coming Online
YTL Power’s transition into a digital infrastructure powerhouse is hitting a critical milestone. The bank expects 110MW of data center (DC) capacity at the YTL Green Data Center Park in Johor to be commissioned by the end of June 2026.
Following the successful launch of Malaysia’s first AI data center powered by Nvidia’s Blackwell chips in late 2025, these new blocks are expected to contribute approximately 22% of group pre-tax profit this year.
High occupancy from global hyperscalers and anchor tenants like SEA Ltd provides high earnings visibility.
Utility Stability: Singapore and UK Performance
While the “new economy” assets grab headlines, YTLP’s traditional utility pillars remain remarkably stable:
Power Seraya (Singapore): Profit margins are expected to hold steady at 17%. With 85% of its volume locked into long-term retail contracts, the division has minimal exposure to volatile pool prices.
Wessex Water (UK): After a 20% tariff hike in April 2025, the water division has successfully turned around. RHB sees an additional 2% earnings upside pending a regulatory decision on March 17 regarding a further 5% hike to cover rising capital expenditure and interest costs.
Potential “Front-Runner” for New 1,400MW Gas Plant
RHB identifies YTLP as a leading candidate to win a bid from the Energy Commission to build a new 1,400MW gas-fired power plant in Malaysia.
Project Value: Estimated at RM5.6 billion.
Projected Impact: A successful bid could add 26 sen (+5%) to YTLP’s target price, yielding an estimated project IRR of 12%. This would mark a significant return for YTLP to the Malaysian independent power producer (IPP) scene.
RHB slightly adjusted its FY26 earnings forecast downward by 9% to account for a stronger Ringgit against the Pound and SGD, but raised its FY27 estimates due to the accelerated DC rollout.
