Important time-tested proven market rules or tips
Jaks - Annual net profit of Hai Duong power plant in 2021 is RM 248 million
OTB
Publish date: Wed, 04 Mar 2020, 10:19 PM
Dear valued members,
Background
- The consumers in Vietnam are paying USD 8 cents for 1 kwh of electricity from Vietnam government.
- I assume profit margin for Hai Duong power plant is around 30%.
- Hence I assume net profit margin of USD 2.4 cents for 1 kwh of electricity sells to Vietnam government.
My calculation
I wish to show you the below calculation how I can get RM 248 million.
The cumulative power sales of Vinh Tan 1 were 8.194 billion kwh per year based on annual 7,238 utilization hours.
Since Hai Duong power plant is the same spec as Vinh Tan 1, this power plant is built by CPECC and Vinh Tan 1 is built by CEEC. CEEC is a subsidiary of CPECC who is also Jaks's partner in JHDP.
Since Hai Duong power plant is the same spec as Vinh Tan 1, this power plant is built by CPECC and Vinh Tan 1 is built by CEEC. CEEC is a subsidiary of CPECC who is also Jaks's partner in JHDP.
I will assume the same cumulative power sales were 8.194 billion kwh per year.
Profit margin is USD 0.024 (2.4 USD cents).
1 USD = RM 4.20.
Jaks owns 30% stake of Hai Duong power plant.
Calculation
= 8,194 * 0.024 * 4.20 * 30% = RM 248 million.
This profit is tax free.
EPS = 248/651 = RM 0.38
1 USD = RM 4.20.
Jaks owns 30% stake of Hai Duong power plant.
Calculation
= 8,194 * 0.024 * 4.20 * 30% = RM 248 million.
This profit is tax free.
EPS = 248/651 = RM 0.38
The present share price of Jaks is 1.28.
If PER = 10, the target price of Jaks is RM 3.80 in 2021, the potential gain is 197%.
If PER = 15, the target price of Jaks is RM 5.70 in 2021, the potential gain is 345%.
If PER = 15, the target price of Jaks is RM 5.70 in 2021, the potential gain is 345%.
FA report
- I assume all Malaysian operations to be zero value. Evolve Concept Mall is valued at RM300 million, I believe this amount of money is more than enough to cover all losses in Malaysian operations.
- FY 2019, the profit after tax is 109 million.
- FY 2020, I projected the profit after tax of 150 million. 60 million is the construction profit from power plant and 90 million on the sale of electricity in 2020.
- FY 2021, I projected the profit after tax of 248 million from the sale of electricity only.
- The target price below is based on PER=10.
| Year | Price | PAT | EPS | PER | Target price | Gain % |
| 2019 | 1.28 | 109 | 0.17 | 7.64 | 1.67 | 30.81% |
| 2020 | 1.28 | 150 | 0.23 | 5.56 | 2.30 | 80.01% |
| 2021 | 1.28 | 248 | 0.38 | 3.36 | 3.81 | 197.62% |
My 2 cents comments
- I feel very confident that Jaks will perform very well in 2020/1.
- I recommend Jaks is because of its Hai Duong power plant in Vietnam.
- I take all Malaysian operations of Jaks to be zero value.
- I am very confident that the net profit of its power plant can make RM 248 million in 2021.
- It is so difficult to find a good stock like Jaks in 2020.
Final decision to buy is always yours.
Thank you.
Ooi
寧可天下人負我, 休教我負天下人
Disclaimer :
Please be informed that the aforesaid stocks are solely for the purpose of education only ; it is neither a trading advice nor an invitation to trade. For trading advice, please speak to your remisier or dealer representative.
Final decision to buy is always yours.
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Discussions
3 people like this. Showing 49 of 49 comments
If u talk so,good.. everyone oredi rush to buy oredi la.. shoud be traded at rm4 oredi.. u think u beter than fireign funds ka.. u found out tis gem earlier than foreign funds ka... who dun know ur mother is a pusy
2020-03-04 22:55
U tell me how,many articles,come out in one month? Ppl pun fedup... jaks boss pay u comision ka
2020-03-04 22:58
I am very confident that the net profit of its power plant can make RM 248 million in 2021.
===========
don''t make me laugh, OTB.........
u were also very confident of your convulated calculations during the bubble of HengYuan, Lion Ind.........and , I sure long time readers know many many more similar disasters..................
2020-03-04 22:59
Its ironic that at such record low level Interest Rate from Central Banks, market had given such low PE to stocks in Bursa due to extreme pessimism/uncertainty.
A low PE is justified on a stock with a high uncertainty of future earnings - due to perceived risk. As market uses a greater discount factor.
This is justified for country with political instability and general decline in productivity growth - GDP. This is true for Malaysian local businesses now..including Banks.
However:
........
(1) JAKS is not a local company.
JAKS should not be treated as a local company when JAKS power plant is a foreign business in one of the most rapidly growing economy - Vietnam.
(2) JAKS is not in a vulnerable sector in a declining economy.
Market is being blind now as it has not screened JAKS out as a utility sector from other vulnerable sectors in a declining economy.
(3) JAKS is a utility stock with a BOT contract with high degree of certainty in profitability.
The BOT contract assures a stable recurring income for next 25 years.
.............
As such,
JAKS should not be trading at PE lesser than 10 at any point in time.
Given a dividend payout policy of say 50% in the future...the PE should not be anything lesser than 15 (at such low interest rate environment).
2020-03-04 23:03
@siongkhoon, please refer DK66 article 'Jaks Resources - A Wild Estimate Based On Abbreviated Results' - its from an exact identical plant with similar contract just started operation about a year ago.
2020-03-05 00:08
Thanks OTB for your insight. I have been holding JAKS since last year. Come rain or shine, I will still hold it till the TP is achieved.
2020-03-05 08:51
IBs have not come in because Hai doung has not generating any power yet. IBs very careful and cautious in very of their investment in order to avoid any mistake.
IBs will only coming into JAKS once Hai doung starts operate and sell electricity. That will happen in two months time. May2020
2020-03-05 09:38
I don't think veitnam government will give a 30% margin for Jaks. Most PPA will be around 20% and jaks profit will be at 165 millions with EPS at 25.4. Once JAKS income is stable i believe IBs will rate JAKS at a higher PE of uo to 14 and this will translate into share price of 3.55. This will only happen in 2021. Once one unit start operating, JAKS price will be at 1.77 in two months time and by the end of the year Jaks price will be at 2.5.
2020-03-05 09:56
Hi OTB yes in perfect conditions it can be achieved.
I think the major reason Jaks is at a low price is Issues regarding perceived Jaks management honesty and transparency.
To me the major shareholder have been diluting and issuing securities that is questionable in nature.
THey only hold very little Jaks shares which makes IB nervous and that goes for me as well.hahaaha... I know most of their holdings are held under nominees which begs the question what is the reason behind this.
Controlling shareholder management seems extremely secretive on the power plant compare with MFCB which have clear precise announcement and costing right from implementation to final COD.
lastly yes I am holding Jaks share bcos even at this price it still a good bet compare with its peer as long as a reasonable discount is given for the above uncertainity. No risk no gain...
konghefattchoy everyone
2020-03-05 09:59
Sifu's Miss Universe normally cant last long...will turn into old n ugly lady in 1 to 2 years time...let's c
2020-03-05 10:03
In my humble opinion, the appropriate timing to go in is after second unit of turbine start operating where we already sure the workingability of the turbine from unit one and if there are any problem will be rectified during this period.
In after share price of RM2 is not bad at all with no risk exposure and better margine in a shorter time.
2020-03-05 10:04
@ OTB
Try using USD2.1cent instead and exchange rate of RM4 to USD1.
Yours is a little too optimistic.
Being conservative in the computation will be better, if earnings are better, it would be a bonus.
My 2 cents.
2020-03-05 10:06
Net profit is RM 206 million.
EPS = 0.316
Target price is 3.16 at PER=10.
Thank you.
2020-03-05 10:10
agreed with Icwin on the Jaks management part. i do not know why the management need to be so scecretive about their Jaks power plant. they should show more transparency like MFCB. But still, i believe Jaks Hai Duong BOT will do will until 2021! the profits is real and vietnam is in serious short of electric supply.. current valuation is too cheap to ignore.. Must be patience to let the real value surface to investors.
lcwin Hi OTB yes in perfect conditions it can be achieved.
I think the major reason Jaks is at a low price is Issues regarding perceived Jaks management honesty and transparency.
To me the major shareholder have been diluting and issuing securities that is questionable in nature.
THey only hold very little Jaks shares which makes IB nervous and that goes for me as well.hahaaha... I know most of their holdings are held under nominees which begs the question what is the reason behind this.
Controlling shareholder management seems extremely secretive on the power plant compare with MFCB which have clear precise announcement and costing right from implementation to final COD.
lastly yes I am holding Jaks share bcos even at this price it still a good bet compare with its peer as long as a reasonable discount is given for the above uncertainity. No risk no gain...
konghefattchoy everyone
2020-03-05 11:32
Why got article again. Price stagnant can't rebound.? ..
Already so many article written about jaks...who really interested for long term i sure they already bought it. No longer need promote.
The coming 2nd half of 2019...world economic n listed company financial will be doom due to covid-19...as u see now up n down ..up n down just a fund institutes selling out their holding slow slow.
2020-03-05 19:59
Same players from heng yuan la. It is the same OTB + probability gang. Just replace stockraider with DK, you got the same gambling party
2020-03-05 20:03
Not to say they wont make money. They might. People who wanna chase must discount the target price given by sifu by 50%. Remember, stockraider hengyuan TP RM 50
2020-03-05 20:07
these guys r real sifus, frm air-cond comfort,thousands km away in KL, can come with rm248m income a yr, +- some minor diff.
Running a power gen. business is all clockwork, once you get the computation right , thks sifus !!
2020-03-05 20:10
Posted by Flintstones > Mar 5, 2020 8:03 PM | Report Abuse
Same players from heng yuan la. It is the same OTB + probability gang. Just replace stockraider with DK, you got the same gambling party
Posted by Flintstones > Mar 5, 2020 8:07 PM | Report Abuse
Not to say they wont make money. They might. People who wanna chase must discount the target price given by sifu by 50%. Remember, stockraider hengyuan TP RM 50
--------------------
Ans :
I recommend Hengyuan at 5.95 and the last one at 8.00.
I told all readers here I had sold all at 17.50.
All readers followed me are laughing all the way to the bank.
All records were still available in I3, you can check and verify them.
Please get your records right.
Please note that I have very good memory.
I recommend stock based on TA and FA, I am very sure FA of Jaks is very good.
You can verify my statement and check the FA.
I am not a gambler, I am an investor and I know what is my probability to win.
Thank you.
2020-03-05 20:30
According to statistic, 90% of investors lost money in stock market.
10% of investors made money in stock market.
It is understood that most of investors will talk bad about Jaks without verify FA of Jaks.
I expect may be 10% of people really put in effort to check the FA of Jaks.
Do your homework before you buy this stock.
Thank you.
2020-03-05 20:35
"Profit margin is USD 0.024 (2.4 USD cents) 1 USD = RM 4.20. "
I think assumption of this profit margin is too high. It is around RM 0.10 per Kwh.
2020-04-06 19:44
shhhh
be careful
take care
Very Big Sharks will not be happy
Posted by warrantKing > Apr 6, 2020 7:44 PM | Report Abuse
"Profit margin is USD 0.024 (2.4 USD cents) 1 USD = RM 4.20. "
I think assumption of this profit margin is too high. It is around RM 0.10 per Kwh.
2020-04-06 20:01
I have no intention to offend anyone. Just express my opinion.
https://www.thestar.com.my/business/business-news/2014/01/29/close-ytl-power1mdb-race-for-2000mw-power-plant-explains-delay-in-award
Refer to link above , most power plant player bid at 25sens to 28sens per kWH .
Assume margin 20% , profit margin should be RM0.05 per kWH
Moreover, YTL Power only show profit margin of around 5% in their report.
So i doubt profit margin of 0.024 USD per KWh is achieveable.
2020-04-06 21:18
OTB . Dear sir, I have been reading your post and your comments in i3 for a while. I would like to subscribe to your service. I just can’t find any link or any guide to it . Could you please guide me how to subscribe
2020-05-09 10:43
cruger12345, i warn you be very careful, dont trust anyone. Going to hear Value Investing is better than this trader. So many mentor outside, no need to come to him.
2020-05-09 10:47
Posted by cruger12345 > May 9, 2020 10:43 AM | Report Abuse
OTB . Dear sir, I have been reading your post and your comments in i3 for a while. I would like to subscribe to your service. I just can’t find any link or any guide to it . Could you please guide me how to subscribe
-------------
Dear cruger12345,
Thank you for your good words and trust in me.
Please email me tbooifx@gmail.com
Thank you.
2020-05-09 11:03
Thank you Karimboss. I have been in the market for 20 years. I know what am I doing. Things need to be fair to everyone. Nasty comments flying here and there towards almost everyone. But the only thing for sure is no one is putting a gun on our head to force us to buy or sell. How do you judge it is value investing or trading ? And what is wrong is trading ? I myself trade when I see there is an opportunity. I don’t see there is anything wrong to broaden my view and try to learn more. Thanks for your warning and duly noted.
2020-05-09 11:22
As i know this guy has been made subcriber loss a lot. Decision is always yours. Good Luck.
2020-05-09 11:31
Calculation
= 8,194 * 0.024 * 4.20 * 30% = RM 248 million.
=======
30% is RM 248 million.
Billion $ profits from a 1.2GW plant after depreciation and interest cost??
what is the total GW in Vietnam?
like that whole GDP of Vietnam is make up of power plants..........lol.
There is no way Vietnam will give out this kind of PPA.......
2020-05-09 11:44
there is the trouble with this OTB...never learns..........what is your track record with convoluted calculations in the past....OTB?
Heng Yuan? Lion Industry? many many others..........
2020-05-09 11:47
OTB,,...u stupid, those bureaucrats in Vietnam not stupid one.....They are very capable people.
2020-05-09 11:53
Why people so excited leh ??
Agreement says Vietnam govt willing to give 12% pa gross return in terms of Dong....reasonable return but not exciting mah...!!
Posted by qqq33333333 > May 9, 2020 11:44 AM | Report Abuse
Calculation
= 8,194 * 0.024 * 4.20 * 30% = RM 248 million.
=======
30% is RM 248 million.
Billion $ profits from a 1.2GW plant after depreciation and interest cost??
what is the total GW in Vietnam?
like that whole GDP of Vietnam is make up of power plants..........lol.
There is no way Vietnam will give out this kind of PPA.......
qqq33333333
1993 posts
Posted by qqq33333333 > May 9, 2020 11:47 AM | Report Abuse
there is the trouble with this OTB...never learns..........what is your track record with convoluted calculations in the past....OTB?
Heng Yuan? Lion Industry? many many others..........
qqq33333333
1993 posts
Posted by qqq33333333 > May 9, 2020 11:53 AM | Report Abuse
OTB,,...u stupid, those bureaucrats in Vietnam not stupid one.....They are very capable people.
2020-05-09 11:57
qqq3,
No point to attack me.
You should know your performance for 2020.
I do not wish to quarrel with you.
I measure and I know my performance.
I made > 1 million profit in Hengyuan.
2020-05-09 11:58
One more thing...electricity tarifs in Vietnam is among the lowest in South East Asia. They need low electricity tarifs to encourage industrialization.
Now, with oil prices this low, coal has already become the most expensive form of energy world wide..........Back in 2010, coal was the cheapest form of electricity.
The world changed a lot since then...................coal plants are closing shop around the world...........In US , marginal cost of coal plants already higher than total costs of alternative energies...That is why US is closing coal plants left right and center...........
2020-05-09 11:59
u think they are closing coal plants in US due to climate change meh??
In US, they are closing coal plants because of pure economics.....
2020-05-09 12:05
Thank you for your information.
I really want to take a serious look when power plant is ready or after COD.
2020-05-09 12:09
stockraider > May 9, 2020 11:57 AM | Report Abuse
Why people so excited leh ??
Agreement says Vietnam govt willing to give 12% pa gross return in terms of Dong....reasonable return but not exciting mah...!!
===============
IRR 12 % on capital....not project cost .....I think it is reasonable to assume 10-12% IRR on capital employed, not project costs.......
2020-05-09 12:28
IRR 12 % on capital....not project cost .....I think it is reasonable to assume 10-12% IRR on capital employed, not project costs.......
Jaks and their advisers has done thousands of hours on projections ...based on their projections Public Bank has stated the IPP will increase their NPV by 50 sen per share over 20 years period..............hahahahaha
Vietnam government is happy with that........
2020-05-09 12:41
IPP with a lot of government guarantees on costs etc.....IRR 10-12% on capital employed very good already..........still want super profits?
go ask Icon to redo his calculations using 10-12% IRR on capital employed, he will get a some what accurate picture.....
project cost XXXX
less bank borrowings YYY
Capital employed ZZZ
2020-05-09 12:45
IPP with a lot of government guarantees on costs etc.....IRR 10-12% on capital employed very good already..........still want super profits?
That is possible with YTL and Mahathir in the 1990s.....
Those were ancient times..........U think Vietnam government so bodoh one meh?
look at how they handle the virus..........Vietnam bureaucrats not stupid one................
2020-05-09 12:53
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Stop,promoting la.. everyday same story..
2020-03-04 22:45