There are some misunderstandings about Cypark biz and its financials. We can not and should not compare Cypark with Serba although there some similarities. Cypark is the leading renewable energy player that own and operate solar and other forms of green energy projects. The high debts and gearing is very acceptable in this kind of Cypark biz models where the debts are mostly tied to the projects that have long term power purchase agreements with the off takers such as TNB. It is a very normal practice in a project with guaranteed purchase agreement with a creditable off taker to have very high gearing such as 3 to 4 times. With respect to negative cash flow from operation, this is due the fact that most of the projects were still under construction. In addition the WTE project was already booking profits even though it was still under construction as it is a Service Concession Agreement project with the government. Cypark does not own the WTE project but only provide the required service and Cypark wrote the fair value of the service provided as an intangible asset. Most of the intangible asset in Cypark balance sheet is from service concession work, not from goodwill which only amount to RM 462,000 only in the last annual report. Those who understand Cypark biz and it's biz model can know the fair intrinsic value of Cypark.
Directors gave themselves cheap shares earlier on via ESOS at the price of only 59.5 sen, so they can still make good gains even selling at current low price. Anyhow they can always reward themselves again with another round of cheap or even cheaper shares via ESOS!
@garychee8, if there is really shortage of coal for the power generation, the impact on the profitability of Jaks JV IPP would be small, if any, as most of the payments received are from ensuring the power plant available for power generation. Although Vietnam has its own local coal production, however it may need to import some coal if the country continue to build coal power plants.
Share price may go lower further as the new shares to be issued via PP are at 55 sen only. Pestech should have chosen to issue new scripts when the stock price is high, not when it is very low as currently is. Good for the chosen ones that will subscribe but at the expense of the rest of us.
Prefer RI as I can also buy shares at discount, wouldn't you. PP shares issued at discount can be a quick guaranteed profit for the chosen subscribers for they can short first and then replaced by cheaper shares from PP. One more thing, the subscribers, unless insiders or major share holders, are always kept secret from other share holders.
Private Placement up to 10%. Existing shareholders will be negatively effected as it is dilutive and not given the chance to take part in the PP unless you are the "right" persons. Warrant holders will be negatively affected too as no adjustment to exercise price although PP shares are issued at a discount.
Please do not compare KPower with SCIB as the two companies have each totally different history and business. Just take a look at KPower, from a losing fabric manufacturing company then suddenly turn itself into a construction companies winning a no of mainly hydro power projects from all over the world and turn itself around with big profits within such a short time, just like a magic show.
The Annual Report for Year ending 30 June 2021 was given clean opinion by the Auditor. It is only certain transactions subsequent to the year end that was qualified. Please do not compare it to that of Serba Dinamik accounting issues.
Must understand the company you are investing throughly before you invest. Experience and knowledge in the biz in which Cypark is involved together with some understanding of accounting and finance are required to value the company properly. Otherwise if you just looking on the surface the current high gearings and negative cashflows with out understand what behind those numbers, you may not make the right valuation. One more thing, investors always look to the future not in the past or even what is happening now.
Agree heavy borrowing not backed with assets that have no guaranteed future income can be dangerous. Heavy borrowing by itself can not be automatically construed as unhealthy. Must understand in detail how the borrowings are spend on.
Heavy borrowing is due to Cypark biz model. Cypark develop, own and operate, not merely as a contractor, a no of RE projects with REPPA with TNB as the off taker. The power purchase contracts for example, for solar. is 21 years and Cypark will reap future benefits with little risk by owning these capital intensive projects and mind you debts for financing these power projects are ring fenced. It is worth nothing that many Cypark solar projects, for example, were developed earlier where the returns of investments are much more lucrative.
"The Board of Directors also wishes to advise that the Company had submitted its application to Bursa for the Relief Period to be extended beyond 7 January 2022 and is currently awaiting for Bursa's decision." Today is already 10 January 2022 and AA is still being quoted and traded! Does it not mean that AA application for Relief Period extension is already approved in principle ?
SKS Airways receives full air service license effective Jan 1, 2022. Very unexpected some one dare to start an airline now during this pandemic. Could it be that the future of this biz is bright and there is still not enough competition?
Cypark has completed an EPCC for a 30 MWac/49 MWdc solar farm project for a client in Kedah ahead of time. Cypark to do the O&M as well for 21 years for the project and provide the financing too. Excellent and Syabas to Cypark!
Started to build base on the way up. Cypark is much undervalued and misunderstood. It is in fact the leading renewable energy company here in Malaysia and started in this sector some time ago already and will reap good returns going forward, Cypark had managed to developed and still continue to add a large portfolio of renewable energy projects ranging from solar, biomass, biogas to WTE. It is worth noting that many of the for the projects, for example solar farms were built much earlier where the rates of returns were much more lucrative than now.
Serba Dinamik Holdings Bhd has confirmed that it has defaulted on its US$222.22 million (RM939.77 million) sukuk andFitch Ratings has further downgraded Malaysia-based energy service provider Serba Dinamik Holdings Bhd's long-term issuer default rating to "RD" (restricted default) from "C". Not to forget there are cross default provisions in the other debts as well. Best of luck to the equity holders, the last to get whatever left over, if there is any.
During such a long term engagement with KLIA, there will be likely further expansions or modifications to the APM system or other works in the national airports that will place Pestech in a good position to get involved further.
Normally if the contract is from A to Z, the profit margin not only attractive but will have steady and robust cash flow over a long period of time. Pestech is well established in this kind of project packages especially in overseas like Cambodia Ect.
The new shares issued at 11.3 sen via PP will be traded from today. Imagine some one sold earlier at say 15 sen and then cover back the sold share via PP subscription at only 11.3 sen, you can made a profit of 32.7% with no risk and within a very short time! Very smart move!
I fully agree with you on this issue @ykloh. Some companies abuse this method of issuing new discounted shares and to make matter worse, the regulator now allow companies to issue up to 20% via PP. PP is always done with no transparency and we never know who are the subscribers and how they were selected, Existing shareholders should be given the first right of refusal for these new issues but instead they were completely kept in the dark. New discounted shares issued via PP will definitely have negative impacts on existing shareholders.