MIDF Research: YTL Power on track to deliver data centres, with second 8MW under Johor Data Centre 1 to come online by year end

• The research house also said YTL Power's power usage effectiveness at 1.3 was ahead of industry standards.

KUALA LUMPUR (Dec 16): YTL Power International Bhd's (KL:YTLPOWR) data centres are well on track, with the second phase of 8MW under Johor Data Centre 1 (JDC1) expected to come online by end-2024, according to MIDF Research.

In a note on Monday, the research house also said YTL Power's power usage effectiveness at 1.3 was ahead of industry standards.

"Power usage effectiveness is about 1.3, ahead of the industry average of 1.5 to 1.6. The second block of 8MW, which is currently under testing phase, is expected to come online anytime soon (before end 2024)," MIDF said after a site visit at YTL Power's green data centre park.

JDC1 will have an information technology (IT) load of 48MW (facility load 72MW) where Sea Ltd will be the anchor tenant with a 32MW capacity offtake, it noted.

"The first block of 8MW was commissioned in May 2024, and the IT load stood at 4.5MW (facility load 6MW). The two other phases for Sea of 8MW each are expected to be commissioned by 2026 and 2027.

"There are no off takers yet for the remaining 16MW capacity, but YTL Power is in the talks with prospective clients," it said.

Meanwhile, the second phase of YTL Power’s data centre development will be JDC2 and JDC3, both AI data centres with IT loads of 20MW and 80MW respectively, according to the research house.

JDC2 is expected to be delivered to YTL AI by end January 2025 for the installation of NVIDIA GB200 chips. JDC3 is still under construction and is expected to be completed by mid-2025.

The third phase, or JDC6, will be a 40MW colocation data centre, which has already secured an off taker and is currently being constructed according to the client’s specifications.

"The whole core and shell structure is expected to be delivered by mid-2025."

MIDF maintained a "buy" call on YTL Power with a sum of parts-derived target price of RM5.64, based on 11.6 times FY2026 forecast price-earnings ratio, which remains below YTL Power’s 10-year mean valuation of 12.4 times.

"We continue to like YTL Power for its strategic expansion into data centre, which is progressing well. We also believe YTL Power is a potential beneficiary of the strong RE (renewable energy) growth trajectory under NETR (National Energy Transition Roadmap), particularly for RE exports given its presence in the Singapore power sector," the research house said.

The group’s expansion into the data centre business began in December 2021 when it acquired a 50% stake in Dodid Pte Ltd, which owns a 12.5MW Tier-3 data centre in Singapore. Subsequently in April 2022, it announced its development of a 500MW data centre campus in Johor, which will be powered by solar energy.

At the time of writing, YTL Power shares were down seven sen or nearly 2% at RM3.62, valuing the group at RM29.9 billion.

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!