Tuesday, 13 March 2012

RHB Research maintains Market Perform on YTL Power, unch FV RM2

KUALA LUMPUR (March 13): RHB Research Institute is maintaining its Market Perform call on YTL Power with an unchanged sum-of-parts derived fair value of RM2.00 for now pending official confirmation that it had secured the government’s 1Bestarinet project.

It said on Tuesday, quoting The Edge Financial Daily, that the project (worth RM1.5 billion over five years but could be worth RM4.5 billion if extended to 15 years), is in the process of being implemented by YTL Communications Sdn Bhd (YTL Comms), a 60% owned subsidiary of YTL Power.

“Although no official announcement has been made, we are surprised to learn that YTL Comms has already rolled out the service to a number of schools in the Klang Valley, having starting since December 2011,” it said.

RHB Research said to recap, YTL Comms had appeared as the winner of the project, according to a posting on the Ministry of Education website but this was taken down very quickly a few hours later.

The project involves providing Internet access and a virtual learning platform to 9,924 schools across the country.

“This development is a surprise, but nonetheless positive for YTL Power as the 1Bestarinet project allows YTL Power to monetise its relatively new and somewhat under-utilised WiMAX network, which has about 300,000 subscribers only,” it said.

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