YTL Power shares up despite higher capex by its UK operating unit — RHB Investment Bank

KUALA LUMPUR (July 10): YTL Power International Bhd’s (KL:YTLPOWR) share price was up by one sen to RM5.20 in the early session Wednesday, despite higher capital expenditure (capex) proposed by its operating unit Wessex Water in the United Kingdom.

At 11am, a total of 894,600 shares changed hands.

Wessex Water has submitted its five-year business proposal (2025-2030) to the water services regulation authority, including a higher return and capex allocation of £3.5 billion over the next years versus £1.4 billion.

RHB Investment Bank Bhd said it understands that the significant spike is mainly driven by legal or regulatory requirements on river health-led measures and could lead to the average bill rising by about 30%.

“We remain positive on Wessex Water’s outlook given its excellent operational performance and the higher legal and regulatory capex requirements to preserve the environment and meet long-term water demand.

“The outcome of the next five-year business proposal will be known by the end of this year,” it said in a note Wednesday.

Therefore, RHB Investment said it has maintained a ‘buy’ call on YTL Power with a target price of RM6.68, it said.

Wessex Water is one of 10 regional water and sewerage businesses in England and Wales and has been consistently ranked as the best water and sewerage company, according to industry regulators.

It supplies more than 282 million litres of water to 1.4 million people and about 44,000 businesses daily. It also offers wastewater treatment to 2.9 million people and about 57,000 businesses.

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