Thursday, October 13, 2011

YTL Power rises in active trade as price attractive

KUALA LUMPUR: YTL POWER INTERNATIONAL BHD []'s share price rose in active trade in late morning on Thursday, Oct 13 as analysts viewed the current share price as undervalued.

At 11.08am, it was up four sen to RM1.73 with 4.30 million shares done.

Maybank Investment Bank Research said YTLP's share price has slipped to attractive levels implying net dividend yields of 5.5% or more than 10% above the historical average and only 1.3 times one-year forward price-to-book value which is an 8'' year low and even below the Global Financial Crisis (GFC) trough of 1.6 times in October 2008.

'This devaluation is despite its relatively resilient earnings base. Therefore, we maintain our DCF based TP of RM2.02 but upgrade our call from Hold to Buy,' it said.

Maybank IB Research said deep value is emerging with little downside risk.

'We will not be surprised should YTLP's shareholders embark on corporate exercises to capitalise on its currently attractive valuations. Also, we understand that it is studying the possibility of acquiring distressed utility assets in Europe, providing another re-rating catalyst,' it said.

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