KUALA LUMPUR (April 3): YTL Corporation Bhd (KL:YTL) and its utilities arm climbed on Friday, drawing strong buying interest as investors bet on stronger growth prospects from a boom in data centres.

YTL Power International Bhd (KL:YTLPOWR) rose as much as 10% to RM3.52, its highest since Jan 16, after the utilities company flagged to analysts a faster data centre expansion plan to cater to strong demand as well as a potential listing of the operations. Parent company YTL was up 9% to RM1.91.

“We came away equally upbeat on the company and a clearer view that YTL Power is moving beyond a defensive utility play to a higher growth digital infrastructure exposure,” said MBSB Research, now the most bullish research house on YTL Power with a target price of RM5.63.

On Thursday, YTL Power held a briefing and told analysts that it is accelerating plans for its Green Data Centre Park in Johor, aiming to double capacity to 1,000 megawatts within three years from the initially planned 500 megawatts. To date, the company has secured commitments for up to 300 megawatts.

Further, YTL Power is considering the listing of its data centre unit as well as bond or sukuk issuances to fund the expansion, according to analysts who attended the company’s briefing.

YTL Power may be also benefiting from shortages of electricity and gas turbines from the mushrooming of data centres globally, according to AmInvestment Bank.

The company is now receiving “more interest from American customers as it is getting more challenging to set up data centres in the US,” the house remarked.

Shares of YTL Power have rebounded from their lows following the outbreak of the Iran war last month. The stock has 11 ‘buy’, four ‘hold’, and no ‘sell’ calls, with a consensus 12-month target price of RM4.23, according to Bloomberg.