The issue is sometimes I have gone way ahead of the markets and the company itself, and the share price may not move or may even turn south after my recommendation, just like the case of Genting and AEON. But I still believe eventually the markets will realise the values and potentials of these two companies.
IOIPG stock re-rating now is obviously spurred by its recently announced plans for a Singapore REIT and a Malaysia REIT, as the markets here still prefer companies to find ways to unlock value of their assets.
AEON stock may only get re-rated if the company announces a REIT plan of its own, while Genting may need to wait for some more time to carry out a US listing plan for its vast assets in the USA. AEON may or may not do it, depending on how shrewd the management is and how aggressive the company expansion plan will be for next few years.
For Genting, it has missed a window for the US listing, i.e. in 2023 when federal fund rates in the US were still at low levels and its Resorts World Las Vegas was operating in full steam after the grand opening in late 2022. Now it may have another window of opportunity for a US listing, I guess it will wait till Resorts World New York City clinches a full casino license in New York in Dec this year and Federal Reserves lowers interest rates by at least two times by end of this year or 1H 2026.
And for YTL, it will continue to inject any of its matured hotel assets into YTL Hospitality REIT to unlock the values when the asset achieves certain stability in business operations. The serviced apartment that YTL acquired earlier this year together with Blackrock will be injected into Starhill Global REIT after the apartment is revamped into a top-notched hotel / serviced apartment tower.
For YTL Power, it has missed an opportunity to list up PowerSeraya in 2024 when it achieved fantastic results. There is another opportunity for doing so in 2026-2027 when the current retails margin stabilises (it was disturbed by a small solar power player into the competitive electricity market in Dec 2024) and the new 600MW hydrongen-ready CCGT is about to commission by Dec 2027.
There may also a possibility for YTL Power to list up Wessex Waters in the UK stock exchange, mainly to raise funds for the capex programs in 2025-2030. Recall that Wessex has been granted a capex program of GBP4.2 billion for the new regulatory period of April 2025 - March 2030. Assuming a gearing ratio of 70%, Wessex will still need to raise equity funding of about GBP1.3 billion over 5 years. Though Wessex's operating cashflows will be sufficient to cover the equity funding requirements (estimated GBP200-250 million a year of operating cashflows from April 2025), but it will deplete any cashflows for dividend payments. Hence, it will make sense to do a listing of Wessex Waters in UK stock exchange in 2026. Looking at the listed water companies in the UK, I think Wessex would be able to get a valuation of 1.3x RCV. By March 2026, Wessex' RCV will reach about GBP5.0 billion and total debts will rise to about GBP3.4bn, so Wessex may get an equity valuation of 1.3x GBP5.0bn - GBP3.4bn = GBP3.1 billion. Listing up 40% stakes of Wessex would bring in cash proceeds of GBP1.24 billion sufficient for the equity funding of its capex programs in next 5 years. Then Wessex would be able to pay out dividends of at least GBP100m every year to YTL Power.
there is no way of forecasting the future in an accurate manner, but you are able to gain foresight of the trajectory is already a rare breed within market players....so i would applaud your ability to do so!
i just wished that i found your posts much earlier in i3 regarding ytl power, would have secured my child's university fees by now if i did....but still very much thanks to you that as of now, my ytl power's position is in a comfortable green position
just my personal gut feel, i just don't think AEON would want to REIT their assets
as for genting, never a fan of Lim Kok Thay's management style, odd related party transactions and overly fattening his own wallet with an exorbitant salary comparative to shareholder returns
ytl has always been a patient long player (not sure about the new upcoming 3rd yeoh generation)....they don't chase public valuations aggressively but treat their own employees very well.....maybe this upcoming 3 years will have an interesting proper rerating by the public with good execution of data centre, uk's brabazon and the upcoming ccgt generator.....
wessex water being one of the best (if not the best) run water company in UK is a good icing that no one properly appreciates though
Glad that you have benefitted from the share price rally of YTL Power. Well, we could never buy at the lowest point. Those who have followed my suggestion last month to add YTL Power shares at RM3.20-3.30 will have bought at a months-low level and been sitting on >30% paper gains.
Me too don't think AEON will go for a REIT plan, as its previous investor relation officer told me that AEON Japan did not have any REIT plan yet for its Malaysia or Vietnam subsidiary, though the Japan mother company has adopted a REIT structure of its own in Japan. From my own simulations, it would be better off for AEON Bhd to just expand at a gradual pace without a REIT plan so that it will enjoy 100% of the strong cashflows from the property management segment. If it goes for a REIT plan, it will have to sacrifice part of the operating cashflows in later years which will be more than the savings in tax payments and interest expenses with a REIT structure.
For example, in FY2030, AEON will have operating cashflows of about RM580m after paying RM190m for tax payments and zero interest expense (as AEON will be in net cash position by FY2029). If it goes for a REIT structure by listing up 50% of its interests in the 13 own AEON malls, AEON will have operating cashflows of just RM417m after paying RM104m for tax payments.
YTL Power will be having a second round of re-rating in 2025-2026 for the maturing of its digital infrastructure projects - AI data centre, colocation data centre, dark fibre projects in Johor and RAC 1,600km railway tracks, digital bank etc. as well as for Wessex Waters. The first round of re-rating of YTL Power happened in 2023 for the explosive earnings growth of PowerSeraya and the start of its venture into data centre business.
Wessex Waters will be surely re-rated after investors and fund managers see how much it could make in this Q4 FY2025 after the water tariff hike.
good forecasting and foresight!
The issue is sometimes I have gone way ahead of the markets and the company itself, and the share price may not move or may even turn south after my recommendation, just like the case of Genting and AEON. But I still believe eventually the markets will realise the values and potentials of these two companies.
IOIPG stock re-rating now is obviously spurred by its recently announced plans for a Singapore REIT and a Malaysia REIT, as the markets here still prefer companies to find ways to unlock value of their assets.
AEON stock may only get re-rated if the company announces a REIT plan of its own, while Genting may need to wait for some more time to carry out a US listing plan for its vast assets in the USA. AEON may or may not do it, depending on how shrewd the management is and how aggressive the company expansion plan will be for next few years.
For Genting, it has missed a window for the US listing, i.e. in 2023 when federal fund rates in the US were still at low levels and its Resorts World Las Vegas was operating in full steam after the grand opening in late 2022. Now it may have another window of opportunity for a US listing, I guess it will wait till Resorts World New York City clinches a full casino license in New York in Dec this year and Federal Reserves lowers interest rates by at least two times by end of this year or 1H 2026.
And for YTL, it will continue to inject any of its matured hotel assets into YTL Hospitality REIT to unlock the values when the asset achieves certain stability in business operations. The serviced apartment that YTL acquired earlier this year together with Blackrock will be injected into Starhill Global REIT after the apartment is revamped into a top-notched hotel / serviced apartment tower.
For YTL Power, it has missed an opportunity to list up PowerSeraya in 2024 when it achieved fantastic results. There is another opportunity for doing so in 2026-2027 when the current retails margin stabilises (it was disturbed by a small solar power player into the competitive electricity market in Dec 2024) and the new 600MW hydrongen-ready CCGT is about to commission by Dec 2027.
There may also a possibility for YTL Power to list up Wessex Waters in the UK stock exchange, mainly to raise funds for the capex programs in 2025-2030. Recall that Wessex has been granted a capex program of GBP4.2 billion for the new regulatory period of April 2025 - March 2030. Assuming a gearing ratio of 70%, Wessex will still need to raise equity funding of about GBP1.3 billion over 5 years. Though Wessex's operating cashflows will be sufficient to cover the equity funding requirements (estimated GBP200-250 million a year of operating cashflows from April 2025), but it will deplete any cashflows for dividend payments. Hence, it will make sense to do a listing of Wessex Waters in UK stock exchange in 2026. Looking at the listed water companies in the UK, I think Wessex would be able to get a valuation of 1.3x RCV. By March 2026, Wessex' RCV will reach about GBP5.0 billion and total debts will rise to about GBP3.4bn, so Wessex may get an equity valuation of 1.3x GBP5.0bn - GBP3.4bn = GBP3.1 billion. Listing up 40% stakes of Wessex would bring in cash proceeds of GBP1.24 billion sufficient for the equity funding of its capex programs in next 5 years. Then Wessex would be able to pay out dividends of at least GBP100m every year to YTL Power.
there is no way of forecasting the future in an accurate manner, but you are able to gain foresight of the trajectory is already a rare breed within market players....so i would applaud your ability to do so!
i just wished that i found your posts much earlier in i3 regarding ytl power, would have secured my child's university fees by now if i did....but still very much thanks to you that as of now, my ytl power's position is in a comfortable green position
just my personal gut feel, i just don't think AEON would want to REIT their assets
as for genting, never a fan of Lim Kok Thay's management style, odd related party transactions and overly fattening his own wallet with an exorbitant salary comparative to shareholder returns
ytl has always been a patient long player (not sure about the new upcoming 3rd yeoh generation)....they don't chase public valuations aggressively but treat their own employees very well.....maybe this upcoming 3 years will have an interesting proper rerating by the public with good execution of data centre, uk's brabazon and the upcoming ccgt generator.....
wessex water being one of the best (if not the best) run water company in UK is a good icing that no one properly appreciates though
Glad that you have benefitted from the share price rally of YTL Power. Well, we could never buy at the lowest point. Those who have followed my suggestion last month to add YTL Power shares at RM3.20-3.30 will have bought at a months-low level and been sitting on >30% paper gains.
Me too don't think AEON will go for a REIT plan, as its previous investor relation officer told me that AEON Japan did not have any REIT plan yet for its Malaysia or Vietnam subsidiary, though the Japan mother company has adopted a REIT structure of its own in Japan. From my own simulations, it would be better off for AEON Bhd to just expand at a gradual pace without a REIT plan so that it will enjoy 100% of the strong cashflows from the property management segment. If it goes for a REIT plan, it will have to sacrifice part of the operating cashflows in later years which will be more than the savings in tax payments and interest expenses with a REIT structure.
For example, in FY2030, AEON will have operating cashflows of about RM580m after paying RM190m for tax payments and zero interest expense (as AEON will be in net cash position by FY2029). If it goes for a REIT structure by listing up 50% of its interests in the 13 own AEON malls, AEON will have operating cashflows of just RM417m after paying RM104m for tax payments.
YTL Power will be having a second round of re-rating in 2025-2026 for the maturing of its digital infrastructure projects - AI data centre, colocation data centre, dark fibre projects in Johor and RAC 1,600km railway tracks, digital bank etc. as well as for Wessex Waters. The first round of re-rating of YTL Power happened in 2023 for the explosive earnings growth of PowerSeraya and the start of its venture into data centre business.
Wessex Waters will be surely re-rated after investors and fund managers see how much it could make in this Q4 FY2025 after the water tariff hike.
always looked forward to each working day of your takes for the day, thank you very much for sharing consistently almost daily
谢谢您的分享🙂