KUALA LUMPUR, June 5 — YTL Power International Bhd’s share price declined in the morning session despite its subsidiary, YTL Communications Sdn Bhd, acquiring a 60 per cent stake in Konsortium Jaringan Selangor Sdn Bhd (KJS) for RM49.8 million.
YTL Communications is 60 per cent-owned by YTL Power.
At 10.30am, YTL Power shares slipped one sen to RM1.55 with 260,600 shares changing hands.
Kenanga Research said the acquisition was unlikely to have any material impact on YTL Power earnings but more to complement its existing telecommunication business.
“With this and the growing subscriber base, earnings prospects for YES (YTL Communications’ 4G mobile internet network) are set to be better,” it said in a research note today.
It added that with the ready telecommunication structures in Selangor, YTL Power could reduce capital expenditure for infrastructure.
KJS is a joint venture company with the Selangor state government via its wholly-owned subsidiary, Kumpulan Darul Ehsan Bhd, and is the lead coordinator in respect of planning, implementation and maintenance of the telecommunication infrastructure services in Selangor.
The company signed a 30-year management services agreement with the state government in 1999 to coordinate the planning, implementation and maintenance of the telecommunication infrastructure services in Selangor.
It was also awarded the network facilities provider licence by Malaysian Communications and Multimedia Commission for 10 years from April 2005 to April 2015, allowing it to sign the licence agreement with telecommunication companies to build, own and lease telecommunication structures.
Currently, KJS owned over 100 telecommunication structures in Selangor.
Kenanga Research has maintained an “Outperform” valuation on YTL Power and retained its target price at RM1.77. — Bernama
