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PublicInvest Research

Author: PublicInvest   |   Latest post: Thu, 28 May 2020, 10:00 AM

 

Jaks Resources Berhad - In Line

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JAKS Resources’ (JAKS) 3QFY19 net profit came in at RM24.9m (-33.2% QoQ) which was largely within our and consensus expectations. YTD, the Group’s net profit of RM90.9m (+226.8% YoY) constitutes 81% and 80% of our and consensus full year net profit forecast. We deem this as in line on expectations of subsequent quarters’ billings from its Vietnam EPC contract to be slowing down given that the first unit is nearing completion by end-2019. Its Vietnam EPC contract is progressing well and has hit c.82% project completion from 70% a quarter ago. Maintain Neutral, with TP increased to RM1.00 (pegged lower 30% discount to SOTP) on lower completion risks of its power plant. That said, we are still wary over the various dilutive equity fund raisings done so far to meet its liquidity demands and the poor execution especially on its property business.

  • Power plant at 82% completion (from 70% in 1QFY19). EPC contract revenue and net profit, as expected, has started to slow down with the Group recognizing RM168.5m revenue and RM38.7m net profit in Q3FY19 as compared to RM226.4m revenue and RM54.3m net profit billed a quarter ago. Remaining works are expected to be completed by 2020. We understand that the power plant should be able to achieve commercial operation date by mid-2020. So far, total revenue of RM1.49bn has been recognized from the job since 2016.
  • Depleting outstanding orderbook. In the absence of new jobs, the Group’s outstanding orderbook depleted further to RM847m from RM1.07bn a quarter ago. As reported earlier, we expect this trend to continue as the Group continues to re-focus its resources on the Vietnam power plant project.
  • Property losses. We understand that completion of the Star Tower and the remaining 3 blocks could take longer than expected with the initial target now being pushed back to 1H2020. We are disappointed by the delay but believe that it is adequately discounted for in our forecasts. Unbilled sales as at 3QFY19 stood at RM115m (from RM121m a quarter ago). Loss at property development was RM17.9m; mainly due to the LAD provided and lower rental income during the quarter. Separately, occupancy at the Evolve Concept Mall remains at 85%, though up from 62% in 1QFY19 with recent signing of an anchor tenant which took up 154k sf.

Source: PublicInvest Research - 26 Nov 2019

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Labels: JAKS

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Chart Stock Name Last Change Volume 
JAKS 0.90 +0.025 (2.86%) 24,293,700 

  Be the first to like this.
 
i3lurker Coal power plants runs the risk of compulsory shutdowns in future
those liabilities from dismantling it is not factored in yet.

in case of compulsory shutdown, its only worth scrap metal.

Many countries including China even, had already initiated a lot of compulsory shutdowns of coal power plants.

Mall is listed at more than RM300 million in books but income stream may mean it could be worth around RM100 million or less only.

so far auditor had not insisted on impairment of RM200 million? why?

Posted by StonedDrone > Nov 28, 2019 2:35 AM | Report Abuse
This research is biased and incomplete. There was no mention of the profit to be generated from the Power Plant upon its completion in 2020 which is 100% confirmed and certain. The Power Plant construction profit mentioned in this report is merely a side bonus token for JAKS while awaiting it to be completed.

Logically, JAKS can ignore or even shut down their construction arm and just sit back and relax to enjoy the yearly profit generated from the power plant concessionaire
28/11/2019 2:43 AM
i3lurker wait until the people who live surrounding the coal power plant start dying.
I guess anybody who complains will be arrested in Vietnam just like in Malaysia.

in any case, all who invest in Jaks will be cursed with bad fook and bad chi.

ha ha ha
28/11/2019 2:53 AM
i3lurker Jaks power plant could be shut down immediately after completion if political change happens in Vietnam.
better pray that "people power" in Vietnam does not occur.

however people are generally very stupid so political change is generally unlikely, example Malaysia, vote back the same people same stupid policies into power.

////While the US sets about decommissioning some of its largest coal-fired plants in 2019, many countries on the other side of the Atlantic have already set dates for the complete phase out of the fuel.
Coal generation in Europe dipped 19% over the first six months of 2019, according to Brussels-based think tank Sandbag, as multiple nations have started taking action to rid their energy mixes of coal before their self-imposed deadlines.
The UK became the first country in the world to officially commit to phasing-out its coal operations in 2015, just before the Paris climate meeting.////
28/11/2019 3:14 AM
Sslee Hahahaha
i3lurker also want to buy JAKS at cheap price. If you post your comment in JAKS forum you will be beaten to a pulp.
28/11/2019 6:32 AM


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