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DK66

Author: DK66   |   Latest post: Sun, 9 Feb 2020, 11:46 PM

 

Jaks Resources - Can I Still Buy At This Price ?

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Jaks Resources - Can I still buy at this price ?

This question pops up every time you see Jaks' price rallies. Everyone is eager to bite a piece of the pie but afraid to be caught buying at the top. 

 

 

The answer is a lot easier if you are looking to buy into an established company because its profit is stable. Just apply a comfortable price-earning ratio (PE) and determine if the current price is acceptable to you.

However, for Jaks, I m sure you are interested because of its power plant in Vietnam which yet to show any operating results. 

Now you are facing multi-dilemma, 

  1. You believe the power plant has good potential but unsure how much it is really worth. 
  2. You believe the price may go higher but you are afraid the price has rallied too much over the past 12 months. 
  3. You prefer to wait for price correction, but the price continues to rally.
  4. DK66 said it is worth a lot but Mr Koon Yew Yin said it is hopeless. I don't know who to believe. 

By now you should realise that Jaks' price has gone up because its power plant is getting closer to commercial operation.

Since nobody has the right answer to how much the power plant is worth to Jaks, it will remain that way until the full year results from operation is released in 2021. Therefore, the price of Jaks during this period will not be guided by the valuation of the power plant but driven by news of power plant's progress and commissioning. At current stage, the construction risk of the power plant is virtually gone. The plant is now in final phase of equipment testing.

Unit 1 of the power plant will most likely achieve commercial operation date (COD) in May/June 2020 and Unit 2 in Sept/Oct 2020. Therefore, during this period, you will only hear news of power plant firing up, turbine successfully tested, successful synchronisation with the power grid and plant's reliability successfully tested and finally achieved COD. As plant COD draws closer, it is rational to expect heightened optimism and awareness toward Jaks.

It is widely known that optimism will push share price higher.

Hence, It is clear that you have to make a decision now. 

Either;

  1. Believe in KYY and leave, or
  2. Buy now and set a comfortable cut loss point, or
  3. Wait for the operation result in 2021 and buy if the price then is still acceptable to you, or 
  4. Others (Please specify)

I hope the article is helpful to answer "Can I still buy ?"

Thank you

 

DK66

P/S: This article should not be regarded as a buy call but rather a call for decision making.


Charlie Munger's Big Lesson: Prepare for Opportunity 

What is the most important personal quality an investor can have? 

Patience... followed by pretty aggressive conduct. It is given to human beings who work hard at it—who look and sift the world for a mispriced bet — that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t. It’s just that simple. 

 

 

 

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Labels: JAKS

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Chart Stock Name Last Change Volume 
JAKS 1.54 +0.01 (0.65%) 9,132,400 

  12 people like this.
 
Travestor If I currently don't have any yet, I would choose 2 and make sure to follow through with cut-loss just in case. This way, downside limited but upside as per your imagination.
13/02/2020 2:26 PM
DK66 This article should not be regarded as a buy call but rather a call for decision making.
13/02/2020 2:26 PM
Travestor Fortune favours only the brave. Those easily swayed can continue to stay and watch but don't be sour grape la.
13/02/2020 2:27 PM
DK66 Travestor, right strategy.

First, limit your losses.
13/02/2020 2:28 PM
speedlikecy no buy/sell call, your money your choice.
13/02/2020 2:30 PM
PureBULL ... Good write-up:
In Nice n easy tone n yet simple n neat, not those super LONG to con everybody n the writer himself.
13/02/2020 3:35 PM
DK66 PureBULL, thank you
--------------
PureBULL ... Good write-up:
In Nice n easy tone n yet simple n neat, not those super LONG to con everybody n the writer himself.
13/02/2020 3:35 PM
13/02/2020 3:44 PM
ramada Reasonable Q&A.
13/02/2020 8:20 PM
Ahleong98 Buy now or else will regret
13/02/2020 8:26 PM
DK66 I believe many would still be asking this question when the price rally again :D
13/02/2020 8:28 PM
ramada I won't say that. I have another K-pop songs to sing.
13/02/2020 8:29 PM
ramada But I hope you guys win big in JRB. I won't jealous.
13/02/2020 8:29 PM
DK66 Ramada, you sold already ? You were one of the early investors.
13/02/2020 8:33 PM
deMusangking today me tambah 1.45
sure free ahmoiing!!!!

haha
13/02/2020 8:36 PM
ramada To be honest, I sold already. But now JRB still in my watchlist. I prepare to buy low or chase high if I think it has a better chance to win.
13/02/2020 8:41 PM
DK66 Ramada, you made one round of profit. Hope to see you back on board soon.
13/02/2020 8:51 PM
ramada Hopefully, DK66 bro.
13/02/2020 8:57 PM
DK66 Most will see the price going up from 0.4 to 1.5 in 12 months as excessive but failed to see that Jaks' price was already 1.84 in Jan 2018. Price trend was distorted due to huge forced selling.
14/02/2020 8:54 AM
Ahleong98 upupup today
14/02/2020 8:56 AM
RainT wah
14/02/2020 2:50 PM
VIN3133 At that time , it was in a different scenario even though the power plant was still quite far away from completion . The super investor with powerful $$$$$ was the mover of price at that time .
Now , we are waiting for powerful $$$$$ to come in . It can be any one , from local and foreign . Once the powerful $$$$$ come in , Jaks will shoot up earlier !
------------------------------------------------------
DK66>Most will see the price going up from 0.4 to 1.5 in 12 months as excessive but failed to see that Jaks' price was already 1.84 in Jan 2018. Price trend was distorted due to huge forced selling.
14/02/2020 8:54 AM
14/02/2020 2:54 PM
DK66 I wish to thank OTB for providing me with the correct adjusted price chart of Jaks
14/02/2020 3:29 PM
DK66 Unless one can correctly estimate the future earnings of the power plant for the next 25 years, you will never be sure whether the current price is too high even though it is trading at historic high now.

The rational logic is the price will continue to trend higher in the mist of growing optimism and awareness on Jaks due to its power plant achieving commercial operation soon.

I m not implying that it will go up forever, it won't.
14/02/2020 10:42 PM
DK66 The 1200MW power plant is a huge investment project, it won't go unnoticed. It is already the most widely picked stock in the 2020 stock pick competition.
14/02/2020 10:46 PM
Ng Chian Zhong Have you thought of which project / construction works would be focusing on after completion of Hai Duong power plant?
15/02/2020 9:12 PM
DK66 Jaks has earlier signed a MOU to acquire a solar farm in vietnam but the deal fell through. I presume the management is still seeking other solar opportunities in Vietnam.
15/02/2020 9:22 PM
Ng Chian Zhong Thanks a lot, I think this would be a question to ask in AGM.
15/02/2020 9:42 PM
DK66 Perhaps the article below can help to answer "can I still buy ?"

Jaks Resources - A More Accurate And Reliable Average Valuation
https://klse.i3investor.com/blogs/Jaks%20resources/2020-02-16-story-h1483823173-Jaks_Resources_A_More_Accurate_And_Reliable_Average_Valuation.jsp
16/02/2020 9:44 PM
DK66 "Can I still buy at 1.50 ?" I asked my friend.

He replied;

Buy at 1.50 and cut loss at 1.10 (important technical support), you lose 0.40

DK66 has derived an average valuation of 5.40 using 5 different methodologies.

If DK66 is wrong, you lose 0.40
If DK66 is 30% right, you break even.
If DK66 is 50% right, the price hits 2.70, you make 1.20. (IBs like to discount 50%)
If DK66 is 100% right, you make 3.90.

So, is it wise to risk 0.40 for a most likely 1.20 gain and a potential 3.90 gain ?

Use your wisdom.
19/02/2020 9:51 AM


 

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