Period 4Q12
/ FY12
Actual vs. Expectations
FY12 net profit of
RM1.23b met expectations, making up 98% of the street’s FY12E net profit of RM1.25b
and 96% of our RM1.28b.
Dividends 4Q12
tax exempt dividend of 0.9375 sen declared. Hence, the total FY12 NDPS of 4.69
sen (-50% YoY; 2.6% yield) was below our FY12E NDPS of 6.00 sen and the
street’s 6.30 sen.
Key Results Highlights
YoY, FY12 earnings
slid by 2%. Seraya’s PBT dipped by 32% due to lower sales volumes and depreciation
of SGD vs. MYR by 1.8%. Wessex’s PBT
declined by 6% on higher related financing cost and depreciation of GBP vs. MYR
by 2.6%. YES also chalked up a higher
start-up pretax loss of RM310m (-11% YoY).
QoQ, 4Q12 pretax
profit decreased by 5% to RM333m, mainly because its Malaysian IPP was hit by a
higher depreciation charge of RM105m, causing the segment’s PBT to decline 45% (continue
overleaf).
Outlook YES
should continue narrowing its start-up losses assuming there will be the
reported (The Edge) Bestarinet contract (RM300m p.a.). We expect YES to fully
break even by FY14E.
Meanwhile, the
government’s decision on Track 1 new capacity (Prai: 1000-1400MW) and Track 2 (1st
Gen PPA extension on lower rates) will
be in Oct-12 and we believe YTLPOWR has a good chance given its cost of fund
advantage. We do not discount the possibility of the sale of its Malaysian IPP
business either, as seen with 1MDB’s acquisitions.
Change to Forecasts
We are reducing
FY13-14E net profits by 4%-3% to RM1.27b-RM1.31b on lower Seraya’s volume sold.
The key drivers continue to be Wessex, Seraya and Malaysian IPPs. We also
estimate a slightly higher FY13-14E NDPS of 6.3 sen each (3.5% yield) (refer
overleaf).
Rating Maintain MARKET PERFORM
Although the stock is
trading at unappealing dividend yields, it is already near, if not at, its trough
valuations - FY13E PBV of 1.3x and FY13E PER of 10x.
Valuation Raising our TP to RM1.80 (from RM1.71) as we
roll over our valuations to FY13E while using an unchanged target net yield of
3.5%*.
Risks Lower
FY13E dividends. Global economic risks, especially Europe.
Source: Kenanga
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