Aseng, I do not agree with you. He is a smart guy, he knows the vietnam circular yet providing false information here. He knows Vinh Tan 1 is the right fit for JHDP. He got desperate after my article.

There is only one reason : He wants to buy cheap.

----------------
Aseng DK66,

You must know, not everyone is deserved to win.
Here go the saying
It is not my cup of tea
but it doesn't mean it is not a good tea
In a most simple language,
He is not the God chosen one for jaks.
If he is not the God chosen one, then even though you explain a 100 times,a 1000 times to him, a goldmine is still look like a shit hole to him. He can't tell why, he simply can not tell why. Very desperate, very frustrated.

What a pitiful guys.
10/05/2020 10:06 AM

elbrutus, it is because he can only say "they are different" and readers will not agree.

The vietnam Circular 56/2014 clearly establish a common guideline for all BOT PPA, and yet they are different ???

He has read the circular and still said O&M not included in PPA ???

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elbrutus DK66 bro...i do noticed that this i3furker has not or rather dare not step into ur territory but more on sslee...I WONDER WHY ???

Aseng, You are right. Publicinvest is using SOP/RNAV method of valuation for JAKS. These valuation method does not take into consideration of future earnings.

And its report is dated before my latest article. Have they seen it ?

-------------------------------
Aseng the power plant has not completed yet.
IB analyst still has not seen the profit contribution
they are not that stupid to construct their fair value now or TP based on forecast numbers
anyhow we are very happy , they are willing to adjust up their TP
that has clearly indicated that they do agree DK66 peer comparative valuation coupled with Icon8888 IRR analysis is a reasonable and reliable piece of work
10/05/2020 12:42 PM

Aseng DK 66,

i am just a satayman ,

nobody bother to tell me what I am saying is right or wrong

do you mind to tell me ?
10/05/2020 12:44 PM

Extracted from Vietnam Government decree.

Article 4. Method of determination of PPA price for thermal power plants

PPA price of a thermal power plant in the base year (VND / kWh) is determined in the following formula:

= P G + P B

1. P G (VND / kWh) is the generation price of the base year and is determined by the following formula:

P G = FC + FOMC b + VC b

Inside:

FC: Average fixed price is determined in accordance with Article 5 of this Circular (VND / kWh);

FOMC b : Fixed price for operation and maintenance in the fundamental year is agreed upon by the two parties in accordance with Article 6 of this Circular (VND / kWh);

VC b : Variable price The base year is determined in accordance with Article 7 of this Circular (VND / kWh).

CLEARLY O&M COST IS INCLUDED IN PPA

Vietnam BOT PPA incorporates adjustments for inflation. Expenses which are USD denominated are adjusted base on US CPI, and expenses which are VDN denominated are adjusted base on Vietnam CPI.

Aseng, I can't bear to see people lying and creating fear especially by those who projected themselves to be experts. There are investors who don't like to read articles but prefer someone telling them buy or sell. These people are their target.

I strongly advice those less knowledgeable readers to demand calculations to prove their words. Don't worry if you can't understand the calculations. I WILL CHECK THE CALCULATIONS FOR YOU. That is my promise !

elbrutus, save your tongue, it is not that he does not want to show his IRR calculation but because he can't. It is IMPOSSIBLE to derive a valuation of 26 cents for JHDP using 12% IRR. I repeat IMPOSSIBLE !

Rookieinvestor, if you had followed the comments over the last 2 days, you should have realised the danger of blind following. You could be following the fear mongers. Their tactics are very good

Fear mongering works because people fear of losing money. They rather forego the opportunity than to risk their money.

Therefore, it is my strong advice that you must try to read not hear.

--------------------------------
Rookieinvestor DK66, most of us are only keen to know whether to buy , hold or sell and the target price.The majority of us who would not read the whole article if it is pages and pages long. Maybe there are a few who would but i believe majority of us would not continue reading after a first few paragraphs unless they are in this field or expertise. At the end of the day, you must understand the audience who are reading your article are not as knowlegable as you in this topic and only confuse themselves on whether to buy or not
09/05/2020 11:36 AM

Instead of showing calculation, he use public bank, the court, and call those trying to prove him wrong using IRR fraudster and liar. Good fear mongering tactics.

elbrutus, he is saying Jaks is expecting earnings of RM17m from JHDP.
(RM17m = EPS of RM0.026 x 10PE = RM0.26)

Vinh Tan 1 made RM651m and he expects JHDP to make only RM56m (RM17m/30%). JHDP is only expected to make less than 10% of Vinh Tan 1 !!!

Yes, he is not here to save you but to CON you !

VIN3133, I m sure you won't get it from those who tried to discredit me.

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Posted by VIN3133 > May 10, 2020 12:14 AM | Report Abuse

真金不需怕火, DK66
You will come out stronger & be respected !
Keep up your good work !
We, the layperson investors , who know nothing about the IPPs as claimed , are waiting patiently & anxiously for the counter calculations to yours for comparison .

Do they refer to Project IRR and Equity IRR ?

I m now confused by your meaning of levered and unlevered

I do not understand why you used 2 different FCF

(2) +284 is RM651m / 4 (convert to USD) + 75m depr (1.87b/25) + 46 interest (@3.5% of 1.4b)


(2) +284m minus fixed principal repayment of 94m and reducing interest for subsequent 15 years.

Please revise the interest rate to 6% and see what happen. Interest rate of 3.5% is too low

Just count how many times he said "liar"

Someone tried to shoot down my article "Jaks Resources - The Most Reliable Earnings Guidance for JHDP" with just one sentence "They are different !" while I gave a dozen reasons why they are near identical.

I was called a fraudster and liar for writing this article. Why? Because he can't find a better way to wipe off the article so he turned to discredit the writer.

The article has about 9000 visits and none disagreed with me because it is a crystal clear case.

I have clearly established a strong link between Vinh Tan 1 and JHDP. Trying to break the link with just one sentence "they are different" is a very desperate attempt.

My reputation in Jaks forum is not built in one day. It takes more than just words of mouth to discredit me. You want to void this article, you need to do a lot better. The article is simple and easily understood, it doesn't take a scientist to understand the logic.

By getting aggressive and call me a liar only reveal your desperation.

This article must be invalidated otherwise all his wrong assertion about IRR calculation will be crushed. Well, provided he did present his spreadsheet.

Sarifah, everyone can fly ?

Sarifah, the idea behind this is if you can successfully project yourself to be an expert of something, then you can simply bluff your way thru without showing proof. Those less knowledgeable readers may actually believe you and your purpose is served.

Well said. I must make a copy of this
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probability @PureBull..

Difference between "speculator" and "investor' is not something discrete, the boundary is not clearly defined...it falls in somewhere in a continuous range between 2 extremes.

On the far left extreme - speculation means making a decision with poorly analyzed information..crude information.....with high uncertainty..

on the other far right extreme, investment means a well analyzed in-depth research made to justify a purchase decision predicting a future event.

the former is naturally short term in nature as the information can be easily overturned unlike the long term nature of investment where the fundamentals remains relatively more resilient.

Its up to one to choose where they want to be between these two extremes.

Originally I thought you were forecasting the FCF from scrap to arrive at 12% IRR in which case you should not use depr because it is a non cash item.

Investee, you need higher IRR to get NPV to 0

Investee, I mistaken you, I forgot that you are working backward with Vinh Tan's Profit. In that case, should add back depr instead of repayment. What was the IRR arrived by you ? Let me know the figure then I explain further.

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Investee Sorry I lost you there. If I read you correctly, we get FCF by PAT + Principal Repayment + Interest. I thought:

(1) FCF = EBITDA - Principal Repayment - Interest & Tax Paid
(2) FCF = (PAT + Interest Expense + Tax Expense + Depr) - Principal Repayment - Interest & Tax Paid
(3) FCF = PAT + Depr - Principal Repayment, assuming Paid = P/L Expenses

When I use your formula FCF = RM651m / 4 + 94m principal repayment + 46m interest for 25 years versus 1.87b outlay, I do get close to zero NPV @ 12% discount but I just don't understand why we add back principal repayment to PAT to arrive at FCF?

I understand the diff between project and equity IRR. The question is whether 12% IRR applies to project or equity IRR.

Thanks for shedding some light here.
______________________________

A speculator is not qualified to call others speculators

qqq3, your "doubts" is too simplistic. Why don't you do a detail cash flow projection and prove your point ?

qqq3, while you attacked OTB on simplicity of his method of calculation, how do you justify your statement "Jaks may not survive in its present form"?

Don't have to wait too long to find out

https://www.facebook.com/108230520514069/posts/235339811136472/

qqq3, I m not losing hope. In fact, I m more confident than ever with this article more convincing than anything anyone has to say about JHDP.

I sincerely invite everyone to challenge the article and tell me the earnings is only a dream.

Jaks Resources - The Most Reliable Earnings Guidance for JHDP

If this article cannot convince anyone of the potential of Jaks, then I have failed miserably and I m running out of more convincing resources. He/Her will have to wait for the actual results of JHDP which I reckon is a jolly good idea.

Jaks Resources - The Most Reliable Earnings Guidance for JHDP

https://klse.i3investor.com/blogs/Jaks%20resources/2020-05-01-story-h1506848575-Jaks_Resources_The_Most_Reliable_Earnings_Guidance_for_JHDP.jsp

Thanks for sharing the information
--------------
Investor L Ai cũng chọn việc nhẹ nhàng, gian khổ sẽ giành phần ai !
Cảm ơn công sức của các anh công nhân.
越南海阳发电厂打算一号机到六月份能发电了。
(Ảnh coppy).

https://www.facebook.com/108230520514069/posts/235339811136472/
09/05/2020 1:16 PM

Relative valuation is the most reliable and convincing method of valuation if the subjects in comparison exhibits very high degree of resemblance. On the other hand, IRR is only as good the the validity of the assumptions made.

IRR valuation method entails making 2 very important assumptions

1. The cash flow pattern
2. The validity of IRR itself

Therefore, how reliable is your assumption of the cash flow pattern for 25 years? and how valid is the 12% projection itself ? To predict the cash flow pattern, you need to estimate the interest rate, the installment payment scheme, the revenue pattern etc.

Dear Sslee,

This is beyond me. I trust that you can play a good role. You have my support.

Thank you
----------------------
Sslee Dear DK66,
By now everyone who knows how to read, knew that JAKS' worth in the power plant per share basis is definitely worth a lot more than its current price per share, no matter how we slice it. However, when we invest in JAKS, bear in mind we are not investing in the power plant, but the whole of JAKS; its other businesses, its management especially.

It is my hope that maybe you can tell us how you are going to play the roles of investor activist to ensure the BOD/Management do not shortchange the minority shareholders by demanding transparency and accountability.
1. Demanding the AGM minutes to be published in JAKS website.
2. Hold BOD accountability to what they promised during the AGM
3. Mobilize the minority shareholders to have their resolution table for voting during AGM or maybe voting you to be the independent director and etc

Thank you
09/05/2020 12:41 PM

Sslee, you must realise that there is no answer that will convince readers with such strong perception, not even answers from the CEO himself.

My only point on IRR is that the project IRR must include the interest costs in its calculation.

Dear Sslee, I thank you for your participation. As i have said, I won't be able to address concern on human behaviour or motives.

Dear all,

May I do a survey here ? Perhaps for my next article.

I would like to know what you are most concerned with about Jaks. Please limit your answer to financial concerns as I won't be able to address concerns on human behaviours or motives.

You may start with,

I m concerned with .................................

Your participation will be most appreciated.

If you do not wish to post it here, you may email to i3dk66@gmail.com

Investee, you are welcome. Your calculation is mostly right except that you should replace depr with principal repayment.

If you take the entire investment capital as initial outlay, you are calculating project IRR.

If you are only taking the equity capital as initial outlay, you are calculating Equity IRR.

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Investee Yea, I figured that out after posting. So now I have FCF -623m for first 3 years, +284m for subsequent 25 years.

-623m is 1.87b / 3 years
+284 is RM651m / 4 (convert to USD) + 75m depr (1.87b/25) + 46 interest (@3.5% of 1.4b)

With the above then I can get close to zero NPV at 12% discount but this is unlevered FCF calculation though.

My confusion is whether 12% IRR is for levered or unlevered. Unlevered meaning I consider -623m in first 3 years with no principal or interest in subsequent years. Levered meaning I consider 25% x -623m = 156m in first 3 years + principal & interest repayment over subsequent 15 years. It's either or situation, right?
09/05/2020 11:09 AM

Rookieinvestor, I m sorry for the long winded articles. Believe me I can't make it shorter as it would be incomplete. In fact, I already thought of your concern and wrote an abbreviated version of my most prized masterpiece "Jaks Resources - The Most Reliable Earnings Guidance for JHDP".

You may like to read "Jaks Resources - Vinh Tan 1 Power Plant in Vietnam Made RM652m in 2019 !" https://klse.i3investor.com/blogs/Jaks%20resources/2020-05-05-story-h1...

I hope you will find that useful for your purpose.

Thank you
--------------- ---
Rookieinvestor most of us are not interested in what DK66 says here. He may know lots of stuff but to the general public we are here to make investment and prefer simple English rather than long and winded information given by DK66
08/05/2020 9:50 PM

You can call me a conman but it is your loss not those who read my articles with on open heart.

It has been more than 3 years since I made my first comment on Jaks and stayed until now. Have you ever seen a conman stayed that long on a stock ?

You are encouraged to read the full version (with proof)

Jaks Resources - The Most Reliable Earnings Guidance for JHDP

https://klse.i3investor.com/blogs/Jaks%20resources/2020-05-01-story-h1506848575-Jaks_Resources_The_Most_Reliable_Earnings_Guidance_for_JHDP.jsp

The conversion of the RCPS will give CPECC a NET total of 40% interest in JPP.
This mean the dilution of original equity interest from 100% to 60%, 30% each to Jaks and CPECC. Therefore, CPECC will ends up with a total of 70%.

---------------
brushsoo Hi DK66,
Thanks for your contribution. I may not follow fully all your discussions.

Just wanted to clarify, the full conversion of RCPS entitle CPECC's equity another 40% of JPP, hence the equity interest is at 90% 3 years after COB?

How the 70% interest of CPECC, instead of 90% come into picture?
08/05/2020 1:41 PM

stockwin, thank you
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stockwin Calling DK66 a conman? Please be fair to him !!
He wrote many articles on JAKS and so far I do not see anyone disputing his figures convincingly.
Let criticise with facts and figures and not destructively.
08/05/2020 11:43 PM

investor77, Thank you
------------------------------------
investor77 I believe DK66 has done a lot of good analysing Jaks. At present FD rates are low, at less than 3%. Any projected returns of more than 4 %, represents good returns.

Before the Black Swan, people heavily buying Jaks at Rm1.50. OTB also promoted this share.KYY and OTB have also went to the site. Just look at MFCB to see that Hydro /Coal Powered Plant can give good dividends and capital returns. Though MFCB is expensive at RM5, a cheaper entry is to consider Call Warant CH which at one time touches 17cents and is now only 9 cents.!!

Everyone is entitled to his own opinion. There are some people who says Calvin Tan,-promoting Opcom for National Fiber Plan or 5G phone, and DK 66 is conman. That is factually wrong. They are actually helping investors to make the right decision. Many have gained from their write ups.

Opcom at one time touches more than 70 cents and went below half the price, but is now climbing up and at around 58 cents. Wont be surprised if it strongly rebounds above the price before the Covid 19, Political upheaval and low Crude Oil price triple whammy. !!
08/05/2020 10:35 PM

Yes, I tried my best to make it simple
-----------------
kalteh Dont think your opinion represents all of us here.
DK66’s investment thesis has provided real insight and it is long winded because the case for Jaks was never straight forward.
08/05/2020 10:04 PM

RM651m is net profit, not free cash flow
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Investee If you don't mind, I would like to ask here. I cannot get what you mean. Is it possible to add more colour as to why cannot get near Vinh Tan 1 result without debt capital? I simply tried with U$1.8b upfront capital, RM651m p.a. over 25 years BOT. It's a lot lower than 12% IRR.

consider carefully, there is no double pay

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Investee Btw, I read the parameter guideline. It's does say equity and debt capital plus repayment of original loan as part of "spending". Sound weird to double pay though.
08/05/2020 8:17 PM

If you do not include the interest cost to the net cash flow in the IRR calculation, the cash flow derived would not have taken the interest cost into consideration. In arriving at the net profit, you have to deduct the interest cost. The resultant amount would be very small. Practically, the project will not be considered worthwhile.

Investee, it is because of the magnitude of the interest cost is too huge not to be taken into consideration when arriving at the project IRR.

A lot of valuation methods were modified to suit each objective. There is no hard and fast rules. You should read Vietnam government's guideline on the parameters used to calculate the IRR for its BOT project.

You can try to do your calculation without debt capital and compare that with Vinh Tan 1's results. With 12% IRR, is it able to achieve Vinh Tan 1's results ? I can tell you off hand, your results won't even be near.

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Investee Project IRR would be regardless of funding structure, right? Then it wouldn't have principal repayments to derive Earnings. The double counting is as though EVN pays 12% IRR for the initial 1.87b and 75% of 1.87b over the loan tenure rewarding debt structure. Just my 2 cents here.
08/05/2020 5:57 PM

I hope Icon8888 won't mind me answering ....