Journey to Wealth
Bina Puri Holdings - OUTPERFORM - 14 JUNE 2012
News Bina Puri has announced that its 80% indirect subsidiary, PT. Megapower Makmur had entered into an agreement with PT. PLN (Persero) of Wilayah Sulawesi Selatan, Sulawesi Tenggara Dan Sulawesi Barat to build and operate a mini hydro power plant with capacity of 4200 KW in South Sulawesi.
Comments This is the sixth power plant concession secured by Bina Puri in Indonesia and it is the first hydro power plant project secured by the company. The construction will take 24 months to complete with an estimated cost of USD10m (RM31.8m).
The tenure of the concession (PPA) is 15 years starting from the first year of its commercial operation i.e. 2014.
Assuming a debt to equity of 80:20, Bina Puri will need to fork out about RM6.4m for its equity portion. As at 1Q12, its cash balance stood at RM64m, which is more than sufficient finance the project's equity portion.
However, we are unable to gauge the expected IRR and earnings contribution from this to Bina Puri at this juncture, pending further guidance from management. However, any contribution will likely only be in 2014 onwards and we are not for now expecting any material contributions to group earnings in the near-term although we will be relooking at our forecasts again after speaking to management.
At present, Bina Puri is operating 5 coal power plants in Indonesia, which had been contributing about RM2.5m to its FY11 operating profit (around 7%).
Outlook Its current order book now stands at RM2.3b, which will last until FY15.
Moving forward, Bina Puri is expanding its property earnings via the launches of a few property development projects in Klang Valley, Johor Bahru and Kota Kinabalu. The estimated GDV for these projects will be more than RM1.5b.
Forecast No changes to our FY12E and FY13E earnings.
Rating MAINTAIN OUTPERFORM
An attractive upside of 43% to our TP of RM1.24.
Valuation We maintain our Target price of RM1.24 with an unchanged 10x PER on FY12E EPS of 12.4sen.
Risks Delays in construction projects.
Price escalation in raw materials and labour costs
Source: Kenanga
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
More articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Introducing MY's First IPO Fund for Sophisticated Investors!
New Update. Discover investment communities that resonate with your ideas
M & A Value Partners IPO Equity Fund has been launched - Targeted 13% Return p.a
Latest Videos
Apps
Top Articles
1
2
4
save malaysia!
Visa-free travel to China extended for Malaysians to 30 days
5
6
7
8
Good Articles to Share
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
