Hong Leong Investment Bank (HLIB Research) remains optimistic about the earnings potential of YTL Power International Bhd. The company's management has indicated that the strong performance of its Singapore subsidiary will be sustainable over the next three years.
This is attributed to the tight power generation capacity in the market and the expiration of take-or-pay liquefied natural gas (LNG) contracts in 2022. The company has secured long-term low-cost LNG supply contracts, increased the percentage of renewed retail energy sales contracts, and expects a contribution from the Tuaspring combination cycle gas turbine (CCGT).
With a record high quarterly profit in the third quarter of 2023, YTL Power is expected to continue its strong performance, driven by the Singapore subsidiary and other factors. HLIB Research maintains a positive outlook on the stock and recommends a "Buy" with an unchanged target price.