KUALA LUMPUR (April 25): Shares of YTL Corp Bhd rallied to a new all-time high on Thursday after Hong Leong Investment Bank (HLIB) flagged more upside even after a 42% year-to-date surge.

YTL Corp emerged as Bursa Malaysia's top turnover stock after it rose as much as nine sen or 3.32% to RM2.80 in the morning session. At noon break, the counter pared gains to RM2.79, with 22.65 million shares traded. At this price, the stock is valued at RM30.67 billion.

In a non-rated note on Thursday, HLIB said that YTL Corp “remains undervalued”, though there is a strong potential upside for the utilities-to-resorts conglomerate.

The research house remains upbeat on YTL Corp’s outlook as the company is expected to continue leveraging its utilities, construction and cement businesses.

“Since our first report in September 2023, YTL Corp has delivered strong earnings performance in recent quarters, with share price run-up above our initial fair value,” it said.

HLIB has now revised its fair value on YTL Corp to RM3.33 (from RM2.10). HLIB does not have a recommendation for the stock, but all three institutional analysts covering YTL Corp have a “buy” call on the stock. The median 12-month target price is RM2.87, according to Bloomberg, which indicates a potential 4.7% gain from the current share price.

HLIB believes that YTL Corp will continue its growth momentum in the financial year 2024 (FY2024) until FY2026 — by 67% year-on-year (y-o-y) in FY2024, 14.4% y-o-y in FY2025, and 6.1% y-o-y in FY2026.

“YTL Corp has strong catalysts from strong earnings momentum (driven by the utilities segment), strong cash flow and dividend payout, [its] leverage to mega infrastructure projects, and new ventures into DC (data centre) and RE (renewable energy) segments for the group’s next stage of growth,” it noted.