YTL Power's AI compute could lift FY26 earnings by 4pct
KUALA LUMPUR: YTL Power International Bhd's artificial intelligence (AI) compute initiative is on track for a launch in the third quarter of 2025 (3Q25).
Maybank Investment Bank Bhd (Maybank IB) expects this to drive a potential net profit increase of around four per cent in financial year 2026 (FY26) and six per cent in FY27.
The firm continues to view YTL Power's risk-reward profile positively, especially given its undemanding valuations.
This optimism is supported by the anticipated confirmation of Wessex's medium-term recovery as well as encouraging progress in its data centre and AI compute business.
Maybank IB maintained a 'Buy' rating on YTL Power with an unchanged target price of RM4.20. Based on news reports, it said the group's AI compute business is on track to go live in 3Q25.
"While substantially more capital expenditure intensive on a per megawatt (MW) basis, the gestation period is likely minimal, unlike data centre colocation, because graphic processing units, which are the biggest cost item, are typically only procured after securing off-takers.
"Thus, upon commissioning, AI compute is likely to be immediately earnings accretive to YTL Power, in our view," it added.
Assuming a 20MW deployment as planned, Maybank IB said YTL Power could incur about RM2.1 billion in capital expenditure, which could, in turn, generate around RM130 million in profit after tax annually.
It said a 3Q25 launch for the initial 20MW would allow AI compute to contribute at least three quarters to YTL Power's FY26, potentially lifting its net profit forecasts by about four per cent and six per cent for FY26 and FY27, respectively.
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