Bullstocks888

Bullstocks888 | Joined since 2024-01-24

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Stock

6 days ago | Report Abuse

I agree with you OTB. HODL!

Yinson is the next YTLPower.

Posted by OTB > 3 days ago | Report Abuse

FPSO Agogo is ready to be delivered and found oil at the end of 2025.
FY 2027 (January 2027) result will include all FPSOs chartered services.
PAT in FY 2027 will be > 1 billion per year.
Debt will be reduced to the minimum.
I believe Yinson will be included in FBMKLCI component stock in 2027.
Good luck.
Thank you.

Stock

1 week ago | Report Abuse

Hold tight. Yinson will perform one day.

Stock

1 month ago | Report Abuse

@dollardolarbill, thanks for your good insights! PBA cash flows are so much higher than earnings. Dividends also increase to 3.5 sen. Hopefully PBA can pay higher dividend next year with higher earnings.

Posted by dollardollarbill > 1 day ago | Report Abuse

@Bullstocks888

The income statement can mask/hide the real earnings of PBA, but not in the Cash Flow statement. Operating cash flow before working capital changes is RM128.5m in 2023 vs. RM87.4m in 2022. Net OCF RM179m in 2023 vs. RM103m in 2022.

The deferred tax expense of RM25.7m is a non-cash item and might potentially be reversed in the upcoming quarters.

The tariff hike for domestic users (and other categories) was just implemented on 1 Feb 2024, not in 4Q23. So, the RM86m increase in revenue that PBA mentioned will only be reflected from 1Q24 onwards.

While costs may have increased a bit in 4Q, these cost increases can be passed on in the next tariff adjustments in 2026 and 2027 for non-domestic and domestic users. Consequently, earnings are expected to continue rising after the adjustments.

I will continue to hold PBA as I believe in my long-term thesis, rather than focusing on the next quarter or two. In investing, one shouldn't feel pressured to chase returns for the next few months. Taking the longer-term view and focusing on the bigger picture is how great returns are generated.

Stock

1 month ago | Report Abuse

@dragon328, I agreed with your conclusion that PBA is worth RM5.80. It could be worth more if you use Ranhill PE of 25x.

There were many haters when you recommended YTL Power below RM1. Look where is YTL Power today! Your track record is proven! Not sure about anyone who will listen to his remisier. 2024 surely a record year for PBA and YTL Power. HODL!

Posted by dragon328 > 1 day ago | Report Abuse

@Bullstock888, yes I concur with your view above.

PBA's Q4 was dragged down by negative deferred tax, a 180 degree change from positive deferred tax in Q3. This is non cash, and I will just ignore them.

PBA recorded PBT of RM68.4m in 2023, this would have been higher if the ICPT surcharge rate was reduced for the whole year, but it came into effect only from July 2023.

Operating cashflows before working capital changes and capex amounted to RM112 million in 2023, which was very strong.

Post water tariff hike from 1st Feb 2024, PBA expects revenue to increase by RM86 million a year. Assuming operating costs remain unchanged, PBT will increase by RM86m.

I take a more conversative approach and assume operating costs to increase by 10% or RM27m in 2024, and so I expect PBT to jump by about RM60m to RM128 million.

Ignoring deferred tax effect, the normal income tax should be minimal as PBA has got enough capital allowance to offset against future taxable profit, so net profit will come to also about RM128 million or EPS of 39 sen.

PBA is a well run utility company and should enjoy PER of 15x (note Tenaga at 23x PER, PetGas at PER 20x), so PBA may be worth RM5.80 a share post water tariff hike.

Stock

1 month ago | Report Abuse

PBA FY23 results looks ok if you exclude the exceptional items.

total PBT RM68.4mil
Additional revenue from tariff hike RM86mil
Estimated pbt RM154mil in FY24
Assuming normal tax rate 24%, PAT RM117mil
At 10x PE ratio, fair price should be RM3.53.

Operating cash flows jumped 70% to RM179mil in FY23 from RM103mil in FY22.

Net cash increase to RM215mil.

DPS increase 17% to 3.5 sen in FY23

What is your view? @dragon328, @KingKKK, @dollardollarbill

News & Blogs

1 month ago | Report Abuse

@KingKKK, I agreed with you YTLPower and PBA are multibagger stocks! Interesting to see which stock hit RM4.50 first.

Posted by Bullstocks888 > 2 weeks ago | Report Abuse

@dragon328, I agreed with you that PBA is grossly undervalued! Fundamentals are getting stronger because they can raise tariff every 3 years and pass on ICPT surcharge to consumers. Still no analyst coverage? It seems that all the analysts are sleeping. I have been averaging up. Topped up at RM2.18.

Posted by dragon328 > 1 week ago | Report Abuse

Correct @Bullstocks888.

PBA is still grossly undervalued at current prices. Though no analyst covers this stock now, the only entity that gives a fair value to PBA currently is SimmmplyWallSt that gives a fair value of RM4.17.

It used a DCF valuation method and actual data of company free cashflows extrapolated forward. It assumed FCF of RM69.53 million for FY2024, obviously it has not taken into account the recent water tariff hike from 1st Feb 2024.

Nonetheless, the valuation of RM4.17 already gives a good upside of over 80% from current share price of RM2.28, even after it used a relatively high discount rate of 9.01%.

By early next year, once this institution has the more updated financial data of PBA post water tariff hike, the fair value will get a further boost from RM4.17.

Stock

1 month ago | Report Abuse

@dragon328, PBA huat together with YTL Power! Both multibagger stocks.

PE ratio:
Tenaga 15x
PetGas 19x
Ranhill 25x
Dialog 20x
YTL Power 10x
PBA 6x!!

Posted by dragon328 > 3 hours ago | Report Abuse

WOW PBA powerful rally.

Finally consolidation is over and the market has realised how undervalued this counter is

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2 months ago | Report Abuse

@KingKKK, well said! HODL for the big money! Ignore the short term noise.

Posted by KingKKK > 1 week ago | Report Abuse

The big money is not in the buying and the selling, but in the waiting. - Charlie Munger

Stock

2 months ago | Report Abuse

@dragon328, I agreed with you that PBA is grossly undervalued! Fundamentals are getting stronger because they can raise tariff every 3 years and pass on ICPT surcharge to consumers. Still no analyst coverage? It seems that all the analysts are sleeping. I have been averaging up. Topped up at RM2.18.

Posted by dragon328 > 1 week ago | Report Abuse

Correct @Bullstocks888.

PBA is still grossly undervalued at current prices. Though no analyst covers this stock now, the only entity that gives a fair value to PBA currently is SimmmplyWallSt that gives a fair value of RM4.17.

It used a DCF valuation method and actual data of company free cashflows extrapolated forward. It assumed FCF of RM69.53 million for FY2024, obviously it has not taken into account the recent water tariff hike from 1st Feb 2024.

Nonetheless, the valuation of RM4.17 already gives a good upside of over 80% from current share price of RM2.28, even after it used a relatively high discount rate of 9.01%.

By early next year, once this institution has the more updated financial data of PBA post water tariff hike, the fair value will get a further boost from RM4.17.

Stock

2 months ago | Report Abuse

Hold on tightly to YTL Power and PBA!

Both are HODL stocks!

Stock

2 months ago | Report Abuse

A matter of time before PBA catch up to Ranhill's valuation as PBA is a pure water utility stock and more efficient!


Posted by dollardollarbill > 3 hours ago | Report Abuse

@Bullstocks888

Exactly. Not to forget that PBA is also in a strong net cash position of RM193m as of 30 Sep 2023 (cash of RM213m vs. total borrowings of RM20m).

On the other hand, Ranhill is in net Debt position (RM1.04 Billion total borrowings vs. cash RM264m)

So PBA is very attractive from an Enterprise Value standpoint too

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2 months ago | Report Abuse

@dollardollarbill Thanks.

150mil seems fair to me. Should be valued at higher PE ratio. Ranhill is valued at 25x despite making less earnings than PBA!

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2 months ago | Report Abuse

@dragon328 thanks again for your constant updates. YTL power is a 5-bagger stock for me!

Keep up the good works!

Posted by dragon328 > 18 hours ago | Report Abuse

@Bullstock888, ya PBA could be a multi-bagger in making and the re-rating could be pretty soon.

Thanks to KingKKK for highlighting this stock last week

Stock

2 months ago | Report Abuse

@dollardollarbill, your projection of 150mil earnings based on new water tariff? Tariff hike will add RM80mil additional revenue. May I know how you derive the balance RM70mil? Thanks in advance.

Posted by dollardollarbill > 6 days ago | Report Abuse

If the market values PBA at a reasonable 10x PE on RM150m earnings, we're looking at RM4.50.

Warren Buffett and Charlie Munger always tried to buy companies that have monopoly-like status. Ideally an unregulated toll bridge.

PBA's issue of low water tariffs has now been resolved, and water tariffs can now be increased every 3 years. The new tariff rate adjustment also requires water consumers to pay the Imbalance Cost Pass-Through (ICPT) rates; for Penang it will be +7 sen for every cubic metre of water consumption for now. So the new effective 'water' tariff rates are actually higher.

Stock

2 months ago | Report Abuse

@dragon328 thanks for your feedback!

PBA had RM100mil operating cashflow for 9 months of 2023 or about RM130mil annualized.

The tariff hike will add another RM80mil of additional revenue a year. So total operating cashflow is RM210 million.

Isn't PBA a bargain at current price of RM2.28?

And can raise tariff every 3 years!

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2 months ago | Report Abuse

@dragon328, I'm following you to enter PBA this week!


I believe PBA can be next multibagger stock!

Stock

2 months ago | Report Abuse

Congratulations to all YTL Power shareholders!

Hodling since December 2022!

Thanks to dragon328 for the constant updates!