PublicInvest Research
JAKS Resources Berhad - All Eyes On Vietnam Power Plant
PublicInvest
Publish date: Wed, 17 Apr 2019, 10:54 AM
PublicInvest
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.
All materials published here are prepared by Public Investment Bank Berhad. For latest offers on Public Invest trading products and news, please refer to: https://www.publicinvestbank.com.my/pbswecos/default.asp
PUBLIC INVESTMENT BANK BERHAD (20027-W)
9th Floor, Bangunan Public Bank
6, Jalan Sultan Sulaiman, 50000 Kuala Lumpur
T 603 2031 3011 | F 603 2272 3704 | Dealing Line 603 2260 6718
All materials published here are prepared by Public Investment Bank Berhad. For latest offers on Public Invest trading products and news, please refer to: https://www.publicinvestbank.com.my/pbswecos/default.asp
PUBLIC INVESTMENT BANK BERHAD (20027-W)
9th Floor, Bangunan Public Bank
6, Jalan Sultan Sulaiman, 50000 Kuala Lumpur
T 603 2031 3011 | F 603 2272 3704 | Dealing Line 603 2260 6718
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
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Discussions
1 person likes this. Showing 28 of 28 comments
"Thus far, the project has secured c.USD1001m in funding with USD859m remaining to be sourced."
This is ridiculous ! Please do research properly
2019-04-17 11:17
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 !
2019-04-17 11:18
Vietnam government will not finalise the BOT contract without proper financing in place.
2019-04-17 11:24
6k for advanced course? Apu...like that I become trainer better. Huat faster than stock punting.
2019-04-17 11:25
"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.
2019-04-17 11:31
"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 ??
2019-04-17 17:21
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
2019-04-17 18:20
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!!!!!!!!!!!
2019-04-18 14:11
@914601117
dun waste your time.......... dun try to be James Bond
dun offer caviar to fools
2019-04-18 17:12
@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.
2019-04-18 17:59
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
2019-04-18 18:03
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.
2019-04-18 18:06
sour grape .....geeks, jerks, stalkers
https://klse.i3investor.com/blogs/qqq3/201270.jsp
2019-04-18 18:08
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...
2019-04-18 18:20
PP coming soon. No money like WCE?
http://www.bursamalaysia.com/market/listed-companies/company-announcements/6130745
2019-04-18 18:34
I sort of expected them to raise more money...........
if they can do it successfully, its good news.
2019-04-18 18:39
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。
2019-04-18 18:42
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
2019-04-18 18:43
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。
2019-04-18 18:45
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Icon8888
useless analyst
no back bone to make buy call despite strong earning visibility
wait until when ? wait until plant starts operating ?
2019-04-17 11:05