KUALA LUMPUR (Aug 15): Kenanga Research has maintained its “outperform” rating on YTL Power International Bhd at RM1.57 with a higher target price (TP) of RM1.85 (from RM1.48) and said it expects YTL Power to report another strong set of quarterly results in the fourth quarter of the financial year 2023 (4QFY2023) with net profit rising 10%-12% quarter-on-quarter (q-o-q).

In a note on Tuesday (Aug 15), the research house said this will be driven by a 43% hike in Singapore power retail price in the second quarter of calendar year 2023 (2QCY2023) and an average 9% tariff hike for Wessex Water from April 2023.

Kenanga said it expects YTL Power’s 4QFY2023 net profit to rise 10%-12% q-o-q to RM585 million-RM590 million on a higher pre-tax profit of RM830 million for the power generation unit with Wessex Water turning profitable at circa RM140 million.

“This leads us to upgrade our FY2023 forecast by 26% to RM1.54 billion from RM1.23 billion.

“We raise our profit forecasts by 26% for FY2023 and by 34% for FY2024, lift our TP by 25% to RM1.85 (from RM1.48) and maintain our 'outperform' call,” it said.