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30 comment(s). Last comment by winston1 at Nov 30, 2020 9:39 PM
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deMusangking
4315 posts

Posted by deMusangking > Nov 29, 2020 5:58 PM | Report Abuse

a good read....awakening article for those who are interested!


gemfinder
3824 posts

Posted by gemfinder > Nov 29, 2020 6:35 PM |

Post removed. Why?


Keyman188
3183 posts

Posted by Keyman188 > Nov 29, 2020 6:47 PM | Report Abuse

Wahhh... if like that FCF & intrinsic value...

Then Keyman188 better invest Mega First Corp Bhd (MFCB) & Malakoff lorr...

Thanks for your advice...kekeke


Philip ( buy what you understand)
4057 posts

Posted by Philip ( buy what you understand) > Nov 29, 2020 7:05 PM | Report Abuse

Owners earnings work best if you actually own the company.
However, the more important question that a minority shareholder needs to ask is this, how much more right issue will be incoming to dilute the earnings per share?

In 2015 when they won the contract, shares outstanding was 400 million. Today it is 650 million, in 2021 how much outstanding shares will be capable.

On the veracity of earnings, we are hearing multiple promises. Previously, management guided to revenue earnings in the ballpark of 240 million a year.
Today the guidance is 720 million a year.


https://focusmalaysia.my/mainstream/upcoming-vietnam-power-plant-could-bring-in-over-rm720-mil-per-year-says-jaks-ceo/

With Andy ang now saying that the power plants can generate revenue of 600-700 million usd every year, who should we believe?

1. The entire list of articles and projects given by dk66 that says he has reliable calculations of earnings?
2. The upgraded projects by Andy ang in an effort to get a higher price for the rights issue?
3. The comparable returns of other power plants in the region?

The simple fact is this. The is no profit GUARANTEE given by CEO, because there is guarantee that he will act on the behalf of the minority shareholders.

So simply put: do you trust the man to do the right thing?

If so, then by all means jaks is an undervalued gem.

But here is the thing, in the past 6 months ever since covid started, if you were to buy stocks at this time, ANY stocks at all, you would have a good chance of making money.

So isn't it better to pick the stocks with the lowest risk with highest gain? There are many stocks out there other than jaks. Sure you could make money in jaks, but would the returns really compound?


deMusangking
4315 posts

Posted by deMusangking > Nov 29, 2020 7:52 PM | Report Abuse

simple! if you doubt stay away! if u believe like i do, then go ahead!
haha


stockwin
71 posts

Posted by stockwin > Nov 29, 2020 8:41 PM | Report Abuse

This alternative valuation make sense. TQ DK


hello_VN
50 posts

Posted by hello_VN > Nov 29, 2020 11:37 PM | Report Abuse

gemfinder, maybe you can come out with some write up or analysis?


stockraider
20959 posts

Posted by stockraider > Nov 29, 2020 11:39 PM | Report Abuse

Stupid answer to Philip loh...!!

Posted by deMusangking > Nov 29, 2020 7:52 PM | Report Abuse

simple! if you doubt stay away! if u believe like i do, then go ahead!
haha


DK
4221 posts

Posted by DK > Nov 30, 2020 12:11 AM | Report Abuse

DCF is the most widely used valuation method by investment bankers for power plants.

--------------------
stockwin This alternative valuation make sense. TQ DK
29/11/2020 8:41 PM


cheated
809 posts

Posted by cheated > Nov 30, 2020 1:55 AM | Report Abuse

Why director Razali Merican sold if TP true?


cheated
809 posts

Posted by cheated > Nov 30, 2020 1:57 AM | Report Abuse

Ytl Power got dividend why Jaks keep asking for money?


Sslee
4614 posts

Posted by Sslee > Nov 30, 2020 6:45 AM | Report Abuse

Dear DK can you just stop painting such a rosy picture to get people buy into your one sided story.
Can't you wait till next quarter result to confirm the earning potential of the power plant.


Sslee
4614 posts

Posted by Sslee > Nov 30, 2020 7:09 AM | Report Abuse

By the way did you attended JAKS 2019 AGM
https://klse.i3investor.com/blogs/kianweiaritcles/2019-07-08-story214175.jsp
• 建造、经营及转移 (BOT) 是一个非常强大的模式,未来相信再也看不到;Hai Duong发电厂投入运作后,预计每年可为JAKS的30%股权带来RM80-100m的盈利;将以Equity Accounted方式,也就是Associated贡献进账,不会录得营业额。
• 虽然协议以每年最低6,500营运小时计算,但是自家发电厂的设计为7,000-8,000小时;必须强调,衡量发电厂的效率并非参考营运小时;这项数据只是用于计算协议价值。
• 如果有资金能力,当然有兴趣收购发电厂额外10%股权,也就是将30%股权提升至40%;10%股权预计值得USD50-60m,相等于RM220-250m;如果决定收购,肯定必须向股东们筹资。
• 现阶段优先专注于发电厂的建筑活动,并寻求提早完工;如何重组发电厂的融资,减少贷款利息,以及提升未来利润,将是JAKS的首要考量

“Jaks Resources - The Most Reliable Earnings Guidance for JHDP”
Annual free cash flow = RMB1,609m = RM981m.
Hence, potential free cash flow from JHDP attributable to Jaks.
@30% = RM981m x 30% = RM294m
@40% = RM981m x 40% = RM392m

Are your Most Reliable Earnings Guidance for JHDP more reliable than what is been told in JAKS 2019 AGM?


DK
4221 posts

Posted by DK > Nov 30, 2020 7:15 AM | Report Abuse

Dear Sslee, which part of the article is misleading ?


Sslee
4614 posts

Posted by Sslee > Nov 30, 2020 7:18 AM | Report Abuse

@DK
The rosy picture of 30% = RM981m x 30% = RM294m.
What if the actual is much lower are you going to take responsibility?


Sslee
4614 posts

Posted by Sslee > Nov 30, 2020 7:26 AM | Report Abuse

Compare to 2019 AGM:建造、经营及转移 (BOT) 是一个非常强大的模式,未来相信再也看不到;Hai Duong发电厂投入运作后,预计每年可为JAKS的30%股权带来RM80-100m的盈利;将以Equity Accounted方式,也就是Associated贡献进账,不会录得营业额。


DK
4221 posts

Posted by DK > Nov 30, 2020 7:29 AM | Report Abuse

Sslee, who will take responsibility in i3 ? Are you ? Why do you discourage sharing of opinion ? Must everything shared be judged by you ? Is QL valuation reasonable ?


DK
4221 posts

Posted by DK > Nov 30, 2020 7:36 AM | Report Abuse

Sslee, If the profit exceeds Rm80-100m, are you going to apologize ?


DK
4221 posts

Posted by DK > Nov 30, 2020 7:47 AM | Report Abuse

If the profit from JHDP is ONLY RM100m, I will apologize to all the readers.


Sslee
4614 posts

Posted by Sslee > Nov 30, 2020 8:26 AM | Report Abuse

Dear DK,
No need to be so emotional. Wait for the next Quarter result.
If any one need to apologize it is the Board/ALP/CFO for giving confusion information.


deMusangking
4315 posts

Posted by deMusangking > Nov 30, 2020 8:32 AM | Report Abuse

Sslee@
dun be a sour grape!!!
u talk so much about insas and yet u r trapped in it!
this is a wake up call- sellur insas and buy Jaks!!!

haha


coolio
623 posts

Posted by coolio > Nov 30, 2020 8:33 AM | Report Abuse

Lol, sour grape sslee


deMusangking
4315 posts

Posted by deMusangking > Nov 30, 2020 8:35 AM | Report Abuse

buy Jaks! then u will be a sweet grape!!!
hahaha


DK
4221 posts

Posted by DK > Nov 30, 2020 8:51 AM | Report Abuse

Dear Sslee,

You can't blame the BOD/ALP/CFO for giving conservative guidance. I already laid out my reasons for taking vinh Tan 1 as earnings guidance. RM294m represents free cash flow not earnings. DCF calculation is based on FCF instead of earnings. That is why I advised readers to understand DCF before reading this article. I believe I have given sufficient warnings in my article.


DK
4221 posts

Posted by DK > Nov 30, 2020 8:58 AM | Report Abuse

I have included the following statement in the article to avoid confusion.

(Caution : free cash flow is different from earnings)


stockwin
71 posts

Posted by stockwin > Nov 30, 2020 11:28 AM | Report Abuse

I think DK is pretty clear with his valuation and assumptions.It is up to readers to make up their mind.If not for DK, no one would write anything about the power plant project here. I for one would not have invested in Jaks and missed the opportunity.Even if his figures is way off, I would not blame him as the assumptions are there for you to think and decide.


DK
4221 posts

Posted by DK > Nov 30, 2020 1:17 PM | Report Abuse

stockwin, thank you for your understanding. Valuation in this article is derived using DCF with certain assumptions. I can't simply ignore it because the results is "too high" or "unbelievable".

Points in the article to challenge are;
1. DCF is not the most appropriate method of valuation
2. RM300m FCF based on Vinh Tan 1's results is inappropriate
3. Using Jaks' weighted average borrowing costs of 6.12% as discount rate is inappropriate
4. Assuming FCF will be reinvested in new opportunity is baseless
5. Assuming constant FCF for 25 years is too simplistic
6. Using Present value as stock valuation is inappropriate
7. Insufficient warnings

I hope more readers can think and behave like stockwin. Take responsibility for your own decision.


Philip ( buy what you understand)
4057 posts

Posted by Philip ( buy what you understand) > Nov 30, 2020 7:17 PM | Report Abuse

I think if anything DK is bring TOO conservative. According to the latest projections by ALP, the power plant is projected to have a revenue of 720 million a year at 30% ownership. According to him, 1200mw plant can generate 600-700 million usd a year.

So no need to begrudge him, dk is doing a good job in getting figures on paper.

It is only a few more months away, let us just wait and see if the results garnered by dk projections is going to be worth waiting 3 year for it.

You yourself had already bought it before as well.

>>>>>>>>>>


Sslee @DK
The rosy picture of 30% = RM981m x 30% = RM294m.
What if the actual is much lower are you going to take responsibility?
30/11/2020 7:18 AM


DK
4221 posts

Posted by DK > Nov 30, 2020 8:14 PM | Report Abuse

The revenue figure given by ALP is similar to Vinh Tan 1's revenue for 2019 of about USD650m.


winston1
380 posts

Posted by winston1 > Nov 30, 2020 9:39 PM | Report Abuse

With all the negative news thrown on ALPs RI, many have made good sum of money. In the end the negative news become a positivity to many.

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