newbie8080,

Those who wonder why Andy did not buy out Jaks at RM0.40 missed the rally to RM1.50. Now Jaks fell on Covid19 and presented another opportunity to buy at RM0.70. Those who continued to wonder missed again.

Your thinking suggests that JHDP earnings cannot be real otherwise Andy must have privatised Jaks. I m sure many shared your reasoning and preferred to wait for results before entry.

I cannot debate your rationale because I m not Andy. But neither are you. Therefore, you better be sure that anything too good to believe is illusive just because the boss is not taking the company private. Are you prepared to let Jaks slips your palm on this notion ?

I m a mathematician who always believe in figures. I can't read minds.

Thank you
------------------------
newbie8080 @DK66

Since this power plant will generate substantial earnings for JHDP of USD5.8 billion over the next 25 years, it's quite hilarious that the owner of J@k$ did not take this opportunity to accumulate more stocks in the open market last few weeks when it was below 70cents.

The best option would be taking the entire company private a few years back when the company is worth of less than RM500mil.
If the owner is wise, he would never want to share the USD5bil with anyone here.

Any thoughts?
11/04/2020 10:14 PM

However, it is also premature to conclude that JHDP will not achieve higher efficiency than Mong Duong II as Chinese technology in thermal power has proven to be more superior than American.

pjseow, probability is right that the 43.3% represents the theoretical figure which may differ from the actual operational efficiency which very much depends on the operation conditions like plant load factor etc.

I will
------------------
probability noted DK66..lets see how things goes...but keep sharing your valuable insights
11/04/2020 9:40 PM

Probability, your decision to switch to Dayang is a matter of choice between 2 companies on your list. I do believe Dayang, a well managed company, will eventually rise again when Covid19 matters no more. Mr Koon has sold Dayang and talked bad about Dayang, as usual, but it won't matter as Jaks has proven so. Dayang was my favorite during the last oil boom. But now I m riding with Jaks.

I sincerely wish you all the best with Dayang.

Mong Duong II made cash distributions to its shareholders during the last 4 years

The loan tenure is 18 years. Hence, it takes 18 years to fully pay off its debts. Both mong duong II and Vinh Tan 1 were immediately profitable upon COD.

I can't validate as I do not have the plant efficiency data of Vinh Tan 1 and JHDP has not commenced operation yet.

-------------------
probability JAKS will still deliver 8.2 b kwh as DK66 and OTB pointed but their fuel consumption will be at least higher by say 42/35 = 20%
11/04/2020 8:32 PM
11/04/2020 8:45 PM

Compare to Pha Lai ?
---------------------
probability JAKS will still deliver 8.2 b kwh as DK66 and OTB pointed but their fuel consumption will be at least higher by say 42/35 = 20%
11/04/2020 8:32 PM

Even mong Duong II achieved efficiency of 34.8% during low plant load

Extracted from my article "Jaks Resources - Effect of Plant Efficiency On Profit"

https://klse.i3investor.com/blogs/Jaks%20resources/2020-03-14-story-h1484838111-Jaks_Resources_Effect_of_Plant_Efficiency_On_Profit.jsp

How efficient is the Subcritical Coal Power Generation Technology of China ?

China's coal plants : New efficiency benchmarks

By James Varley 13 Dec 2019
Since 2004, China has been replacing small, low efficiency, coal plants with larger, more efficient units, and the “six year action plan”, launched in 2014, has set new annual average efficiency targets that must be achieved by coal plants if they are to remain on the grid: 39.6% (net, LHV) for 300 MW units; and 40.9% for 600 MW units. For these 300 MW units to achieve the annual average efficiency target of 39.6% specified in the six year plan, their efficiency under rated conditions needs to be higher than 42%.

https://www.nsenergybusiness.com/features/chinas-coal-plants-new-efficiency-benchmarks/

This suggests that for 600MW units, their efficiency under rated conditions needs to be higher than 43.3%

Vin3133, you are welcome

--------------
VIN3133 Appreciate your comparison , analysis and comments .
Hope it would to some extent allay Probability's concern .
TQVM for your efforts , dear bro DK66.
Take good care & stay safe .
11/04/2020 6:08 PM

Dear OTB,

It is difficult to make comparison of 2 different animals. They may both operate in the same country but the terms and conditions for domestic and international operators vary substantially. I believe JHDP, having limited operation tenure, will logically yield much higher annual profit compare to one which does not need to transfer its assets to the government.

However, I am unable to manage the basis of your assumption on doubling the sales price. It is not convincing without some factual evidences.

Pha Lai is owned by EVN who is also the buyer of its output, hence its profit is purely inter-company related decision. Highly subjective in nature. I will not use it to make projection of JHDP which operates under BOT. Meanwhile, I will stick to what I have explored so far.

Nevertheless, It is enlightening to see an aging coal power plant in Vietnam still generating healthy profit. This should alleviate concerns of many that coal power plants are no longer profitable.

Thank you

---------------------
OTB Dear DK66,

I also did a estimated calculation on this profit.
5.5 billion kwh = RM 279 million
1 kwh = RM 0.05
I believe Hai Duong power plant is more efficient and cost effective.
Moreover, it is a BOT project.
If I take the sale price to RM 0.10 per kwh
The project profit = RM 250 million which is the figure I aimed for.
I believe RM 250 million profit per year for first 5 years is not a problem.
Please comment on my assumption.
Thank you.
11/04/2020 7:11 PM

Pretax profit for 2019 was VDN1529b = RM279m based on net output of 5.5b Kwh
Assuming equivalent of Vinh Tan 1 net output = 8.2b kwh
Net profit before tax = 8.2/5.5 x RM279m = RM416m

@ 30% = RM125m = EPS RM0.192
@ 40% = RM166m = EPS RM0.255

Note that both power plants of Pha Lai are very old already using outdated American technology.

Pha Lai power plants are directly owned by EVN, ie not under BOT. Hence, able to operate for as long as the power plants last. JHDP has only 25 years to recoup its investment and returns.

Pha Lai power plants are made up of smaller generating units, 110mw and 300mw, which are less efficient, if not obsolete, by today's standard.

Pha Lai Thermal Power Plant is the largest coal-fired power plant in Vietnam located in Pha Lai, Chí Linh District, Hải Dương Province, roughly 65 kilometres (40 mi) north-east of Hanoi. It has an installed electric capacity of 1,040 MW. Pha Lai 1 was fully financed and built with the Russian money and experts.

Construction of the 440-MW first plant started on 17 May 1980 and it was completed in 1986. It consists of four 110-MW turbines and eight boilers. Construction of the 600-MW second plant started on 8 June 1998 and it was completed in 2001 by Lilama Construction Company.[1] It consist of two 300-MW units with Mitsui Babcock Energy designed natural circulation boilers and General Electric generators.

Country : Vietnam
Location : Pha Lai
Status : Operational
Commission date : 1983 (Pha Lai I) : 2001 (Pha Lai II)
Owner(s) : Vietnam Electricity
Operator(s) : Pha Lai Thermal Power
Primary fuel : Anthracite
Units operational : 4 X 110 MW (Pha Lai I) : 2 X 300 MW (Pha Lai II)
Make and model : General Electric
Nameplate capacity : 1,040 MW

Vin3133, let me take a look at Pha Lai Thermal Power .........

Yes, hng33 is fairly knowledgeable about Jaks

1k = 2.74 per day = 0.23 per hour for a 12 hours day.

Live whatsapp service for RM0.23 per hour is way below minimum wage.

OTB, you must re-evaluate your charge out rate.

The market is very volatile and uncertain now. There is nothing wrong with sudden change of direction when reacting to new circumstances. To be fair, we must evaluate the reason behind the act before criticizing.

However, your comment may hold truth only if this is a frequent habit.

Still waiting for information
---------------
johnmasino DK66:- How are of the 1st and 2nd turbines coming along? Is it progressing well? Thanks!
10/04/2020 1:16 PM

http://www.ecic.ceec.net.cn/art/2020/4/9/art_43737_2100029.html

安徽电建二公司越南海阳项目圆满完成了主厂房24米层地坪施工，两炉之间地下设施、沟道、地面硬化施工及汽机侧系统管道施工

I hope so, thank you
---------------------
Trapper DK66,There will always be people who will not believe in anything, I have been following your articles closely and I find that they are written with facts and figures.I am sure there are still a lot of people who believe in you, so do not be disappointed.
08/04/2020 10:42 AM

johnmasino DK66:- Don't be disheartened bro. Most of the naysayers are small time short term traders who don't care about JAKS fundamentals. I'm with you until JAKS hits RM4,5,6..
08/04/2020 10:46 AM

Ricky Kiat bro dk66, clowns will not believe whatever u say. dont waste time explain to them. only institution fund will push up jaks share price , not clowns. time will tell. only few months away.
08/04/2020 10:50 AM

If there are still who believe that Jaks cannot profit from its power plant investment in vietnam despite the numerous articles written by me in this forum, I m losing hope here .......

JHDP is not the typical type of IPP where electricity is produced at own costs and sold at market rate.

Effectively, JHDP is merely providing financing and build a 1200MW coal power plant for the Vietnam government as well as operating the power plant on its behalf for 25 years.

I really wonder how many here actually believed that Jaks rushed to Vietnam only to lose money ???

4月1日，安徽电建二公司承建的越南海阳项目现场，施工人员正在进行管带式输送机桁架组合作业。疫情期间，越南海阳项目部圆满完成了主厂房24米层地坪施工，两炉之间地下设施、沟道、地面硬化施工及汽机侧系统管道施工。/越南海阳项目部•白颂文 摄

http://www.apcc2.ceec.net.cn/art/2020/4/7/art_47952_2098532.html

I m not interested in what others are holding. I m only interested in news that relates to what I m holding. That is why I m only interested in Yinson's venture into solar farm, nothing else.

Coal ash slag is not radioactive and poses no threat to human and it can be recycled into building materials for property and highway construction. It is my opinion that this should not be a problem.

-------------------------
Tyre220069 How serious is the permit for construction of disposal site which was mentioned as biggest obstacle?
05/04/2020 8:12 AM

tyre220069, you are welcome. Mong Duong II and Vinh Tan 1 are already in operation

Why so surprised with government contracts containing secrecy clause ? I understand all malaysian government contracts contain secrecy clause. All petronas contracts contain secrecy clause.

Chinese party and the bankers must have seen the PPA as they are interested parties.

Sorry, I misunderstood your earlier explanation.

Is 22m EBITA ? What is the project cost ? How much is the annual loan repayment ?

You need to know the project cost in order to work out the payback period.


-----------------
Philip ( what you can learn from RJ MITTE ) What do you mean cash outflow or cash inflow?

If you to put it in simple english, their net cash inflow (payment from government to rising sun 2 solar power plant), revenue from FIT payment is RM 29 million a year. After they received all the payments for energy generation, payment of tax and operational costs their NET PROFIT is 22 million to owners of the company. Meaning, YINSON is getting around 8 million a year of the payment from this JV. As the company is doing purely solar farm only, and no other business, this 8 million is going to yinson pocket every year for the next 25 years.

1 dec 2020 is the agreed deadline for unit 1 to achieve COD after which LAD applies.

Stage of construction is a subjective measurement. Jaks' total billings stood at 84% as at dec 2019.

---------------------------------
Tyre220069 Can DK66 and OTB enlighten us why the date of commercial operation is on 1/12/2020 and the stage of construction is only 75%,not 93% as at 31/12/2019 as stated in the report?
05/04/2020 8:11 AM

There is a lot of wonder about Jaks. You have the right to remain doubtful but that doesn't mean there is no answer to the questions you wonder. It is either you know or you don't. Just like I do not as much about Yinson's long term FPSO contracts as you do.

As I have said, Andy cannot reveal the PPA as there is a secrecy clause. You should know that, under BOT contract, there will not be any payment from Vietnam until the power plant achieved COD.

Yes, if the power plant fails to achieve COD for unit 1 before 1 dec 2020, there will be LAD. However, I believe there will be allowances for covid19.

I wouldn't know whether you have met the management but I know you won't be able to get material information from them.

Anyway, I appreciate your concern but I m more interested in Yinson's decision to venture into Rising Sun. Do you know where I can get a fuller picture of the deal ? Tq

-------------------------
How rational is your investment into Jaks? Have you been to Vietnam, or talked to Vietnam electricity board? How about the coal sources? Firm and guaranteed as per contract stipulation? Have you even seen the reported contract agreement which I still do not understand why is still kept OSA? Has Vietnam paid a single cent yet to Jaks? Will there be any delay LAD obligations due to covid-19?

Would you have believed me if I said I had already met the management at the time? And they could not clear my questions as an active investor?

If cash outflow is around 22m annually, Net cash inflow is around 8m. Yinson's 37.4% share is around 3m. It will take about 22 years to get back its capital and loan ? I cannot understand the logic......

-----------------------
Philip ( what you can learn from RJ MITTE ) Yinson paid 32 million for the 37.4% stake, and 35 million to pay off the liabilities of rising sun debt. This clears up cost structure.

The power generation is fixed indr 2.44 per kwh. And they generated slightly under 30 million in revenue yearly in 2018,2019 from their solar farm, with debt obligations, operational expenses and taxes coming down to around 22 million a year in their 3rd year of operations.
05/04/2020 8:53 AM

No, I m not interested in buying Yinson. If i m interested in Yinson, I should focus on its FPSO businesses.

However, I m interested in the rationale behind Yinson's investment decision to acquire a minority stake in Rising Sun

-----------
johnmasino DK66:- Are you keen to buy Yinson? Looks like you're based on the information you're asking.
04/04/2020 8:11 PM

If possible, I like to have the following critical information

Cost of solar farms
Equity : Debt structure
Cost of borrowings
Whether Concession is Take or Pay
Kwh electricity output in 2018 and 2019

The 28m revenue is NET cash inflow ? No borrowings ? No interest expenses ?


----------------------------------
Philip ( what you can learn from RJ MITTE ) Yinson paid 67 million for a 37.4% share of the company. At that rate, they will be getting 10.472 million of the revenue generation. Ergo, they are buying it at a lower price to the generation capability. This is sound business principles.

I like the quote by Peter Lynch. Only good companies can see their prices moving north.

When Jaks moved from 0.4 to 1.5 when many other stocks were not performing well, many refused to recognise its potentials. They think somehow Jaks just fried up by 300% ! Now Jaks is down on covid19, many happily claimed they were right.

OTB, we can't help those in denial. I3 is just a small platform. Jaks won't go up just because we promoted and it won't go down just because some talked down. That is why I never bother about those negative remarks. Negative remarks didn't stop Jaks from going to 1.50 and it will remain so.

Stock prices are momentarily affected by market sentiment but prices will eventually reflect the true value of the stocks.

------------------------------------------------
OTB
"I think you have to learn that there's a company behind every stock and there's only one real reason why stocks go up.
Companies go from doing poorly to doing well or small companies grow to large companies" - Peter Lynch
04/04/2020 11:09 AM

USD3 per DAY
---------------------
i3lurker so for solar power plant in India

USD3 X 4.5 exchange rate = 13.5

13.5 X 4 = RM54 per month
(very close to my earlier RM60 conservative figure

Vietnam - In 2018, minimum wages were increased by 6.5 percent and ranged from VND 2.76 million (US$118) to VND 3.98 million (US$171). In 2019, the new minimum wages will range from VND 2.92 million (US$126) to VND 4.18 million (US$180).

India's minimum wage is 176 Indian rupees ($3) for an eight-hour work day, but local authorities can set their own lower rate and at least six states do so.

The above is from google .....

"The LIG - Quang Tri solar power plant project was built in Gio Thanh commune, Gio Linh district, Quang Tri province, with a capacity of 49.5MW; annual production capacity is expected to reach 67.63 million kWh / year, 110 kV connection voltage; with a total investment of more than VND 1,100 billion invested by Licogi 13 Company."

Based on the above information, Yinson's Solar farm of 140MW is expected to generate 191m Kwh/year. Revenue will be 191m x idnr2.44 = idnr466m = USD6.1m = RM27m per year.

The cost of 49.5MW solar farm is about USD47m. 140mw would require around USD133m (RM580m)

"The cost per watt per solar installation (at this scale) will range based on several factors, such as available sunlight hours and location, but it's usually around $1/watt. Thus, a 1-megawatt solar farm would cost around $1 million to install. - energycentral.com "

Therefore, with only RM28m a year, how to achieve payback period of below 8 years ?

However, I admit that I do not have all the necessary information to make a full assessment on the investment.

Note that Vietnam is paying USD0.0935 per Kwh for solar energy compare to just USD0.032 by India.

-----------------------------------------------------
Philip ( what you can learn from RJ MITTE ) They spent 67 million to buy a 37.4% share of riding sun energy pte LTD. The generation is price is idnr 2.44 per kwh, plant started in 2017, generation is 140mw, with sunlight hours of 4-5 per day.

Using their LSS rates their solar revenue is around 28 million per year. The payback period is estimated at below 8 years. With main components inverters ( 10 year guarantee) and solar panel ( 21 year guarantee) Contract is firm for 25 years until 2043.

Aseng, you made the point.

All businesses began from small. Some will make it big some will not. When a company is small, it has to invest to grow. My family business did not pay dividend for the first 10 years because we need capital to grow.

Philip does not trust Andy because Andy hasn't prove himself. Maybe he will change his view 3 years later.

I didn't trust TAN Sri Paul Koon Poh Keong of press metal when it was small.

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

Make the story short.

Phillips does not trust Andy Ang

For those who are interested in how long would a solar panel last ....

https://news.energysage.com/how-long-do-solar-panels-last/

P/S : Nowadays, It is not easy to lie. Because the world has GOOGLE now.

When you plant a durian tree, you have to wait for a few years to wait for it to bear fruits. Now the tree is ripe to bear fruits. Do you need to wait to count the fruits to call it a success ?

The durian tree is for sale;

1. A prudent investor will wait to count the fruits before he offers a price

2. A speculator will guesstimate the number and buy at any price and re-offer for sell before the fruits appear.

3. A planter recognizes the grown up tree and buy if it is selling very cheap


I m not neither an investor nor a speculator. I consider myself a planter.

Take Philip's advice if you do not know enough to be a planter.

IPP business is stable and safe. Either you know the number or you don't. It is a gem if you know the number. Otherwise, you are just gambling.

Thank you.

Are the solar farms to be transferred to the government after 25 years free of charge ? thanks

Philip, sorry for asking again. I need a lot of information. Are the concessions Take or pay?

Philip, do you know the IRR of the solar farms ?

Philip, thanks for your explanation. May I ask what is the capital structure of the solar farm ? Any borrowings? Thanks

Philip, Thanks for sharing the info. May I ask what is the expected payback period of this RE venture of Yinson ?

http://www.apcc2.ceec.net.cn/art/2020/4/3/art_8423_2096534.html