PETALING JAYA: CGS-CIMB Equities Research is cautiously optimistic about YTL Corp’s strategy of making a comeback in the KL-Singapore high-speed rail (HSR) space ahead of the May 2020 deadline of the HSR’s review period.
In its report, it said YTL aimed to leverage on its ERL (construction, concession and funding) track record should HSR’s tender rounds emerge in 2H20F (best-case scenario).CGS-CIMB Research raised its target price to RM1.04 from 99 sen (lower 30% RNAV discount) to reflect the recovery of HSR newsflow in 2Q20 but maintains a hold call ahead of actual HSR outcome in May.The key takeaway from YTL Corp’s small group meetings during the research house’s recent Malaysia Corporate Day was that it was turning more upbeat on its infrastructure outlook
The company sees the tail-end of the HSR review period as an opportunity to re-propose to the government a cheaper HSR alternative.
YTL Corp expects stronger earnings contributions from the ongoing Gemas-JB electrified rail double tracking (ERDT) project in the coming quarters.
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