• 9MFY15 core net profit was in line, although segmentals were a mixed bag.
• As 4QFY15 approaches, there is potential for upside surprise to DPS in the absence of M&A.
• Maintain HOLD with a lower TP of MYR1.60 (from RM1.65).

What’s New

Excluding a forex gain of MYR6m, YTLP’s 3QFY15 core net profit of MYR216m (-20% YoY, -18% QoQ) brings 9MFY15 net profit to MYR694m (-18% YoY), representing 70% of both ours and consensus full-year forecasts.

In terms of segmentals, Wessex and Malaysia power were better than expected. Power Seraya disappointed again with sequential earnings contraction. Wimax losses widened slightly on the back of lower revenue.

Again, no interim dividend was declared. YTLP appears to keep to a single payout for each financial year.

What’s Our View

YTLP’s investment thesis and share price performance in recent years have largely revolved around corporate actions. As 4QFY15 approaches, there is potential for upside surprise to our DPS forecast in the absence of any M&A activities. We do not rule out a repeat of a 10sen DPS in FY15. The company has not done major share buybacks in FY15 to-date.

We tweak our FY15 earning and lower our FY16 earning forecast by 5% to reflect latest operating conditions (in particular, lower contribution from Seraya and higher losses from Wimax). Our TP is trimmed to MYR1.60 (from MYR1.65), and is based on an unchanged 10% discount to our revised RNAV estimate of MYR1.78/shr (fully diluted basis), which is in turn derived from a sum-of-parts with each operating entity valued using DCF.

Source: Maybank Research - 22 May 2015