If I may answer, Icon8888 is calculating project IRR, not equity IRR.
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Investee Icon's projection double counted the capital investment funded by debt, as he took debt principal repayment (75% of 1.87b) over years and initial upfront investment (1.87b). He should take 25% of 1.87b as initial upfront investment which will lower the earnings in later years.
08/05/2020 4:44 PM

Thank you for telling
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GGecko Dai Soh DSO is datasonic, it runs faster than JAKS this morning..at one time up 8 sen
08/05/2020 1:17 PM

sarifah, more importantly, risk free as already COD

Sarifah, about 4
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SarifahSelinder DK66

Given ur profit projections10% ni kan dibeli at PE apa agak nya?

But even news of synchronisation and reliability test can send the stock soaring. Please be informed.

Hng33, Q3 is only my estimation. Do not rely fully on it. Can be earlier or later.

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hng33 DK66, my portfolio already in cypark, solar and waste to energy power concession. Jaks COD will only start in Q3 as indicate by your article earlier due to pandemic, right?

Dear OTB, Thank you for the information

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OTB Posted by probability > May 8, 2020 12:00 PM | Report Abuse

yeah....best is if they can show some sign that thwy will increase their stakes to 40%

may be sifu OTB can dig this info
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Ans :
Jaks will increase their stake to 40% once COD is in place.
May be less than a year after COD.
I was told in this way.
Thank you.
08/05/2020 12:10 PM

Q1 results, whatever it may be, won't be able to suppress the price surge due to the optimism of COD.

Ok, Q1 results may be delayed to June. You may have not be able to endure the pain to see the price shoot up due to unit 1 COD and jump back in before the Q1 results.

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hng33 DK66, I will come back to Jaks after Q1 result release, the reason is Jaks in short term will face financial stretch due to pre- opening expense for its new pacific mall and new pacific office tower. Longer LAD and higher evolve mall and delay in IPP construction progress due to pandemic, all added burden to Jaks financially. I not only cover good prospect of its IPP in 2021 onward, but also take into account short term setback face by Jaks in 2020.
08/05/2020 12:14 PM

what is "Dai Soh" (Dso) ?

If Jaks won't increase its effective stake in JHDP to 40%, we should sell. I m not joking !!

Hng33 probably won't be back for a while as he fears the results for the next 2 quarters.

Wonderful !, welcome back, Probability !

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probability Glad to hear this.

Did buy some JAKS today..

For mong duong II, capital distribution will most like be made towards tail end of the concession period.

Accountant must be careful with their definitions otherwise their backside can be exposed.

But in Mong Duong II case, I can assure you that it is quite safe to refer cash distribution as dividend.

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Aseng cash distribution is a very vague term
we got to get it right first
08/05/2020 11:41 AM

As for the information below, it is obtained from 2018 AR as companies are required to report the impact on earnings due to change in accounting treatment.
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DK66 I am accountant, I know accounting treatment can have profound effect on the reporting of earnings especially when dealing with a transaction which spans as long as 25 years. Mong Dong II started operation in April 2015 and has written back as much USD203m when it adopted the new accounting standard in 2018 with USD40m increase in profit in 2018 alone as a result of change in accounting treatment.

Vinh Tan 1 is still using the old accounting standard. If JHDP is adopting the new accounting standard, It may be reporting higher profit than Vinh Tan 1.
08/05/2020 10:17 AM

Although cash distribution does provide some indication on earnings. However, it is also dangerous for someone without full accounting understanding to fully rely on that notion. Better not in my opinion.

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probability ok thanks DK66,

their cash distribution for 2019 did come to the profit level Vinh Tan 1 reported

if this is true, you can establish a very high degree of certainty that Hai Duong can perform similarly

the IR of AES corp did not want to reveal much to me unfortunately

I m not surprised if the topic on distributions and earnings would be hard to understand without accounting background.

Because Mong Duong II used the term "distribution", It is most likely dividend in nature

Aseng, cash distribution normally means dividend but it can be capital distribution

My article on mong duong II is a only an estimation of earnings based on pieces of information gathered, nothing conclusive. Please read the report with care.

Jaks Resources – Peer Comparison With Mong Duong II
https://klse.i3investor.com/blogs/Jaks%20resources/2019-04-29-story204451-Jaks_Resources_Peer_Comparison_With_Mong_Duong_II.jsp

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probability ok then you did talk about Mong Duong profit, but the only source of info we have is cash distribution from their reports

so i am puzzled where you are getting this profit numbers

earnings and distributions are unrelated

probability, you misunderstood, I never made any relationship between profit and distribution. They are different matters.

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probability ok not assumption, but evident then

any reasoning - why the cash distribution is considered as profit

e.g, payout dividend payout cannot exceed profit? is the cash distribution the first place equivalent to dividend?
08/05/2020 1

Aseng, Thank you for your compliment. I believe sharing can bring good deeds.
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Aseng Good morning my good friends

Congratulation DK66
I am very happy for your success
especially your generosity and your kindness to share with us the best you know.
If you had chosen, not to share but to sell, then I do not think you will gain such a glory that no amount of money can not buy.

Am I right.

This is never my assumption

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probability as such, you are of the opinion the cash distribution will be about the same as their profit and not their free cash flow i guess.

any justification on the above assumption

Yes, can't tell the profit only distribution
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probability DK66, are you able to see Mong Duong 2's profit for 2019.

What i checked with the IR is that its only cash distribution show on their reports.

I am accountant, I know accounting treatment can have profound effect on the reporting of earnings especially when dealing with a transaction which spans as long as 25 years. Mong Dong II started operation in April 2015 and has written back as much USD203m when it adopted the new accounting standard in 2018 with USD40m increase in profit in 2018 alone as a result of change in accounting treatment.

Vinh Tan 1 is still using the old accounting standard. If JHDP is adopting the new accounting standard, It may be reporting higher profit than Vinh Tan 1.

If there is any expert with information which may suggest any fault in my latest article "Jaks Resources - The Most Reliable Earnings Guidance for JHDP", you may email me at i3dk66@gmail.com. I shall timely amend my article. Your sharing will be greatly appreciated.

If there is any information anyone wish to share with me ONLY, you may email to i3dk66@gmail.com. Your information will not be shared in i3 without your permission.

Thank you

elbrutus, this is putting me in a very awkward situation. Because my answer will be "yes" but I m not buying anymore but I m also not selling at this price. Believe me, i m sincere and I m not trying to be funny.

My last call to be buy was when the price was at RM0.80.

So, from now onwards, my best answer will be "I M NOT SELLING AT THIS PRICE"

Is this a good answer ?

When you want to convince someone in a virtual space like i3. You need to give facts and figures. You need to show your computation. You need to be able to withstand challenges.

This is a place where everyone is behind a mask. You don't expect to have trust like a father to his sons. You want to convince readers, you show proof. You can't just say "I expect ....." without showing your spreadsheets.

I encourage respectful challenges. Neither of us may win or lose but it will make the readers more confidence in their decisions.

During the course of my journey with Jaks, only 3 challengers have earned my respect, Mr kcchongnz, Mr Sslee and Mr Probability. I hope to find more.

Thank you

I m truly surprised by the number of visit to my article "Jaks Resources - The Most Reliable Earnings Guidance for JHDP" close to 8500 last count. Maybe the intense discussion here in Jaks forum has attracted many visitors.

Aseng, Yes. IRR is not a subject that is easily understood

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we must move in the right direction, if not , the readers here will be getting more and more confused.


DK66 ,

am I right ?

Dear All,

Let me briefly summarise my discussion with Probability on the matter whether interest cost should be included in the project cash flow pattern when calculating the internal rate of return, IRR.

I said YES but Probability said NO.

My strongest argument : Vinh tan 1 will not be reporting RM651m profit in 2019 had it done its projection of IRR excluding interest costs. Its earnings may be less that half it is reporting. In addition, Vietnam government has allowed debt ratio of 75:25 to be applied in deriving a maximum project IRR of 12% under certain agreed parameters such as utilization hours of 6500.

Probability argument : It is the text book formula

Decide wisely for yourself.
07/05/2020 4:20 PM

Probability, I thank you for your discussion. I apologize if have been harsh in requesting for your IRR table against your wish.

Thank you

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probability No matter what, you are definitely a gem in i3 and i appreciate that a lot. The most sincere & hardworking information provider in i3 - no doubt about it.

Thanks DK66
07/05/2020 3:58 PM

Probability, one thing i m very sure here. No offend to the readers. I don't think many would really understand what we are debating about here but I know clearly where you are leading me to. If you wish to convince the reader here, better to speak with your IRR table.

Probability, My absolute answer is the interest cost must be included in the calculation of project IRR. Otherwise, Vinh Tan 1 would not have achieved its 2019 results of RM652m. That is affirmative.

By the way, are we expecting an IRR table from you ? I don't want the readers here to wait for nothing.

The fact is they are including the interest cost for calculation to establish the desired IRR to compare against the hurdle rate of 10%.

Again, I think we should discuss further when you complete your article.

Since you have done the table, it is best we speak base on your table rather than speaking blindly ? Can you take the trouble of presenting your table in an article. The alignment will be preserved in the article by taking an image of your table. No trouble

Isn't reality more important than text book ?

Probability, there are many versions and revisions of the IRR methodogy. The application of the subject itself is widely debated.

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Posted by DK66 > May 1, 2020 3:36 PM | Report Abuse

Page 21 (summary 9)
https://www.meti.go.jp/meti_lib/report/H29FY/000594.pdf

You notice that the Presumptions used in calculation the IRR include allowance for borrowing costs.
01/05/2020 3:47 PM

Good news ! I3 admin has solved my problem. I m back !

probability, you can post it as an article.

probability, you surely have done the table if you know Vinh Tan 1's IRR is 16%. Can we take a look? It will be more convincing.

Probability, please present your table.

Sarifah, You are right. Vinh Tan 1's results is net of interest costs

icon888's calculation is materially correct except some adjustments to loan tenure and amortization.

probability, why aren't you willing to do the IRR calculation before jumping into conclusion. Readers prefer prove of words.

probability, to exclude the interest cost, Vinh Tan 1 would not have achieved its latest results. Which is more convincing ?

Probably, I hope you are not implying I m hiding something.