KUALA LUMPUR: YTL Power International Bhd's acquisition of nearly 19 per cent stake in Ranhill Utilities Bhd is expected to be a strategic fit given its experience in both water treatment and power generation.
RHB Research said this will also further strengthen YTL Power's footprint in Johor, where the company is also developing data centres and solar parks.
"There should not be an impact on earnings for now, since YTL Power's stake is still below the 20 per cent threshold.
"As such we maintain our earnings estimates for the company," it said in a note.
YTL Power announced that it had become a substantial shareholder of Ranhill after acquiring 243.3 million shares or a 18.87 per cent stake in the latter.
RHB Research believes the block of shares was acquired from Cheval Infrastructure Fund LP, which was also holding 18.8 per cent stake prior to that.
"We estimate the total investment at RM141 million, assuming the block of shares was purchased at 58 sen per unit.
"We keep a Buy stance on YTL Power with target price of RM2.43," it added.