YTL Power shares up 63pct this year, but analysts aren't calling time

KUALA LUMPUR: YTL Power International Bhd shares have jumped 63% this year, but analysts remain cautiously optimistic. The stock has climbed from RM3.30 to RM5.37, adding over RM18 billion to its RM46.85 billion market value. Hong Leong Investment Bank raised its target price to RM7.58, suggesting nearly 47% upside from the August 20 close of RM5.16.

RHB Research increased its target price to RM7 from RM6.35, while its bull-case valuation of RM9.90 indicates the stock could rise another 84% if YTL Power successfully expands capacity. Large institutional investors, such as the Employees Provident Fund and Permodalan Nasional Bhd, have also purchased shares in YTL Power and its parent company, YTL Corp Bhd.

Analyst Daniel Wong from Hong Leong Investment Bank maintained a Buy rating, citing strong growth momentum in the data centre segment. YTL Power's fourth-quarter profit surged 74% quarter-on-quarter to RM646.6 million, bringing FY26 core profit to RM2.2 billion. The company's data centre business has shown impressive growth, with pre-tax profit increasing more than tenfold to RM345.5 million in FY26.

The segment contributed RM244 million to group pre-tax profit in the fourth quarter, up from RM59 million in the previous quarter. Revenue grew 105% quarter-on-quarter, driven by higher utilisation of contracted capacity. YTL Power's data centre ambitions are on the rise, with plans to expand its capacity to 1.2GW at its Kulai data centre campus and 1.2GW at Sedenak Tech Park West.

The company has secured power and water agreements for its Kulai campus, with another 600MW in development. Analysts have raised their price targets accordingly, with RHB Research estimating an additional RM2.90 per share if YTL Power successfully ramps up capacity at Sedenak Tech Park West.