Highlights

PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 24 May 2019, 11:10 AM

 

JAKS Resources Berhad - All Eyes On Vietnam Power Plant

Author:   |    Publish date:


We met up with JAKS Resources (JAKS) management recently and were guided that the overall progress of their power plant in Vietnam is still on track to achieve commercial operation date (COD) by 1H2020. That said, we are still wary of the slow billings of its Vietnam EPC contract which commenced construction in March 2016. The stocks’ recent price run has surpassed our earlier fair value ascribed which suggested a TP of RM0.65, derived from c.60% discount to our earlier SOTP estimates. All told, we maintain our Neutral but reduce our discount from 60% to 50% to our revised SOTP of RM1.50 given recent sector re-rating on revival of certain mega projects, yielding a new target price of RM0.75. Although the remaining earnings from Vietnam (estimated c.RM280m) could surprise on the upside, we believe near term earnings could still be dragged by losses from its property business i.e. property development and property investment which currently amounts to c. RM15m a quarter, but of which we have sufficiently accounted for in our earnings estimates. Execution of its power plant in Vietnam is of paramount importance and we would rather err on the side of caution on the execution risk for now.

  • Power plant at 46% completion. We understand that as at Jan 2019, the power plant has achieved 46% project completion, with significant billings expected in FY19. Management is confident of completing the power plant on schedule and likely to achieve commercial operation date in 1H2020. Key milestones to complete in 2019 are the completion of main plant’s boiler, turbine & generator and other ancillary buildings such as jetty and administration building. Outstanding orderbook from the EPC contract 2 is c.RM1.2bn as at December 2018 or c.70% of the outstanding orderbook of RM1.7bn. Thus far, the project has secured c.USD1001m in funding with USD859m remaining to be sourced.
  • Property Losses. We understand that the property losses will continue this year albeit narrowing by year-end, as per management guidance. The Evolve Concept Mall’s occupancy is still hovering at around 62% with JAKS looking to fill up the space vacated by a big tenant recently by converting it into a recreational sports center. It aims to achieve operating breakeven point by end-2019. As for the property project, Pacific Star, the remaining buildings are expected to be completed by end-2019 as well, with The Star tower to be handed over soon. Unbilled sales from Pacific Star are RM153m.

Source: PublicInvest Research - 17 Apr 2019

Share this
Labels: JAKS

Related Stocks

Chart Stock Name Last Change Volume 
JAKS 0.705 +0.01 (1.44%) 1,549,200 

  hwaism likes this.
 
Icon8888 useless analyst

no back bone to make buy call despite strong earning visibility

wait until when ? wait until plant starts operating ?
17/04/2019 11:05 AM
DK66 "Thus far, the project has secured c.USD1001m in funding with USD859m remaining to be sourced."

This is ridiculous ! Please do research properly
17/04/2019 11:17 AM
DK66 In addition, Jaks Hai Duong Power Company Limited (“JHDP”), a wholly-owned subsidiary of JRB, had on 29 October 2015 informed the Ministry of Industry and Trade of the Socialist Republic of Vietnam (“MOIT”) vide a letter dated 28 October 2015, that JHDP had achieved the Financial Close of the BOT Contract, subject to amongst others, the registration of the shareholder loan agreement between China Power Engineering Consulting Group (Hong Kong) Investment Co., Limited and JHDP dated 19 September 2015 with State Bank of Vietnam and the issuance of legal opinion by the Ministry of Justice of Vietnam.

http://www.bursamalaysia.com/market/listed-companies/company-announcem...

"that JHDP had achieved the Financial Close of the BOT Contract"

Already secured financing !
17/04/2019 11:18 AM
DK66 Vietnam government will not finalise the BOT contract without proper financing in place.
17/04/2019 11:24 AM
Alex™ 6k for advanced course? Apu...like that I become trainer better. Huat faster than stock punting.
17/04/2019 11:25 AM
DK66 "The stocks’ recent price run has surpassed our earlier fair value ascribed which suggested a TP of RM0.65, derived from c.60% discount to our earlier SOTP estimates. All told, we maintain our Neutral but reduce our discount from 60% to 50% to our revised SOTP of RM1.50 given recent sector re-rating on revival of certain mega projects, yielding a new target price of RM0.75." - Publicinvest

Upgrade because the market price has overshot its TP ?
Why reducing discount by 10% ?
What has revival of certain mega projects in malaysia got to do with Jaks ? jaks' project is in Vietnam and was never halted.

Anyway, I think the analyst already had a hard time. Can't get the right information from the management.
17/04/2019 11:31 AM
Investor 999 这是投资银行见了管理层和综合多方面的考虑和讨论而给予顾客的意见。

你们有和管理层讨论过吗?

我感谢与尊重他们的意见。
17/04/2019 12:19 PM
DK66 Kenanga Vs publicinvest. Who do you believe ?
17/04/2019 12:44 PM
DK66 "Hai Duong IPP - FCFE at 12% equity cost, Jaks 30% = RM329m = EPS 0.52" - Publicinvest

Jaks is investing at least an equity capital of RM540m NOW, but the value of its investment is only RM329M now. A loss at inception of investment of RM 211m.!

After getting the SOP, cut 50% again ! So, IPP only worth 26 Cents !!

What kind of investment decision is this ??
17/04/2019 5:21 PM
Sslee Dear all,
For your information:

dari: PIVB HO Trading Department <pivbhelpdesk@publicinvestbank.com.my>
kepada: Lee Soon Sheng
cc: pivbhelpdesk@publicinvestbank.com.my
tanggal: 17 Apr 2019 15.45
subjek: Re: JAKS Resources Berhad - All Eyes On Vietnam Power Plant
dikirim oleh: publicinvestbank.com.my

Dear Lee

Refer to your query on Jacks, enclosed is the clarification from our
Research Department:

The power plant is capitalized at USD1.001bn at as Dec 2018. Bank
borrowing remaining to be injected is USD644m while equity portion is
USD123m (CPECC) and JAKS (USD92m).

Hope this helps to clarify.

Regards
Helpdesk
17/04/2019 6:20 PM
DK66 Sslee,

Thank you for seeking clarification.
17/04/2019 11:59 PM
914601117 For those have more than 20 years of investment experience, no government will let you have big fat profits for foreign investors. That's why in this world, foreign investors will hide or divert the profits to other companies and this JAKS WILL NOT SHOW GOOD PROFITS!!!

WAKE UP!!!!!!!!!!!
18/04/2019 2:11 PM
i3lurker @914601117

dun waste your time.......... dun try to be James Bond

dun offer caviar to fools
18/04/2019 5:12 PM
i3lurker @914601117

let the fools buy it up for us to sell later

:)
18/04/2019 5:12 PM
i3lurker @914601117

I have more than 30 years of online investment experience, local and overseas. NYSE etc..

and I can offer you this Pearls of Wisdom ====>

+++> The Master Sifu Scammer will not bother about you coz plenty of fools around to scam money from.

The "real person" sending someone to your house to disturb you is actually those same fools that you are trying to save.

Those fools will threaten you for disturbing their dream state and conversation with Zhou Gong and also disturbing them from losing their money to scammers. They actually want to lose money. So no point helping them.

You better walk away and leave the fools to lose their money in peace.
18/04/2019 5:59 PM
Icon8888 after selling jaks wb at 29 sen, this fellow has become one of the biggest Jaks sour grape




Investor 999 这是投资银行见了管理层和综合多方面的考虑和讨论而给予顾客的意见。

你们有和管理层讨论过吗?

我感谢与尊重他们的意见。
17/04/2019 12:19 PM
18/04/2019 6:03 PM
Ricky Kiat (^0^)
18/04/2019 6:06 PM
qqq3 y 914601117 > Apr 18, 2019 2:11 PM | Report Abuse

For those have more than 20 years of investment experience, no government will let you have big fat profits for foreign investors.
==========

IPP making IPP profits is normal......any thing else is abnormal.
18/04/2019 6:06 PM
qqq3 sour grape .....geeks, jerks, stalkers

https://klse.i3investor.com/blogs/qqq3/201270.jsp
18/04/2019 6:08 PM
i3lurker Vietnam Mega Projects having problems, behind construction schedule or on hold include but are not limited to the following:-

Intel project in Ho Chi Minh City (you see desktop computers selling meh?)

Empire City

Nghi Son Refinery in Thanh Hoa

New City in Phu Yen

Ho Tram project in Ba Ria-Vung Tau

Nhon Trach Berjaya Dong Nai New City in Dong Nai

South Hoi An project in Quang Nam

Kobelco steel plant in Nghe An

Skybridge Dragon Sea resort project in Vung Tau

but of course someone is using "tai chi" to tell you NO MEGA PROJECTS ON HOLD


ELECTRICITY DEMAND may not BE AS PROJECTED FANTASTICALLY WONDERFUL.....

:)

but nevertheless PLEASE BUY

WHY BUY?

because we need to sell, its quite simple...
18/04/2019 6:20 PM
Dickyyou PP coming soon. No money like WCE?
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6130745
18/04/2019 6:34 PM
qqq3 I sort of expected them to raise more money...........

if they can do it successfully, its good news.
18/04/2019 6:39 PM
Investor 999 https://klse.i3investor.com/blogs/investment_advisory_mai/202928.jsp

这篇文章很适合你, 读一读。

很不幸的,你说对了, 我在WB价格0.300 时换去母股了。
18/04/2019 6:42 PM
Icon8888 Private placement if done properly can be price positive

Place the shares out to syndicate at attractive price, then ask them to goreng

This is standard practice

I am not saying it is going to happen in Jaks case, but keep your mind open

Anything is possible
18/04/2019 6:43 PM
Icon8888 Not interested in your article

You have turned out to be a bit of a disappointment for me


Posted by Investor 999 > Apr 18, 2019 6:42 PM | Report Abuse

https://klse.i3investor.com/blogs/investment_advisory_mai/202928.jsp

这篇文章很适合你, 读一读。

很不幸的,你说对了, 我在WB价格0.300 时换去母股了。
18/04/2019 6:45 PM
Investor 999 买进了某公司股票, 不需要怕股价下跌的。
18/04/2019 6:47 PM
abang_misai Thanks for this wonderful article. I sailang
18/04/2019 6:49 PM
Investor 999 大众投资银行一篇简单的分析就道尽人性的贪嗔痴 !
18/04/2019 7:10 PM


 

417  266  466  748 

ActiveGainersLosers
Top 10 Active Counters
 NameLastChange 
 VC 0.25-0.02 
 VC-PA 0.06+0.005 
 IMPIANA 0.035-0.005 
 LAMBO 0.06+0.005 
 HSI-C5J 0.255+0.01 
 HSI-C5H 0.28+0.01 
 SAPNRG 0.29-0.01 
 DAYANG 0.92+0.03 
 ARMADA 0.185+0.005 
 EKOVEST 0.77-0.005 
Partners & Brokers