Friday, February 24, 2012

YTL Power International: Downgrade to Hold - Dismal dividends; downgrade to Hold

Dividends disappoint again. YTLP's results were within expectations. That said, we are disappointed that it declared a second interim tax exempt DPS of only 0.9375sen or -50% QoQ as it conserves cash for M&As. We slash our dividend forecasts which now imply just 2.5% net yield. We also downgrade the stock to a Hold as there is currently only an 8% upside potential and with dividends unlikely to surprise to the upside. We tweak our DCF-based TP to RM2.05 (+1%).

Maybank Research - 24 Feb 2012

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