Probability is a measure of 'likeliness' that an event will occur - there are no 100% certainty.
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2020-03-12 00:13 | Report Abuse
Information 4:
..............
Source Public Investment Bank Berhad, January 10 2017.
Jaks, together with CPECC, is constructing a BOT power plant, with an estimated cost of US$1.87bn with 25 years’ concession and power purchase agreement with Viet Nam Electricity (EVN). US$1.4bn already secured back in September 2015 from Industrial and Commercial Bank of China, China Construction Bank Corporation and Export-Import Bank of China. The JV has US$160m capital (equity portion) and expects the remaining balance of US$307.1m to be injected in the next 3 years. Management expects strong IRR in the mid-teens with the first unit expected to be completed by mid-2020, and the second unit 6 months later.”
2020-03-11 23:47 | Report Abuse
fully completed means physically completed - no one is saying they had synchronized to the grid
2020-03-11 23:26 | Report Abuse
Information 1
..............
https://www.thestar.com.my/business/business-news/2016/03/29/jaks-eyes-irr-of-12-for-rm7bil-vietnam-plant
HANOI, Vietnam: JAKS Resources Bhd is eyeing an internal rate of return of 12% for its Vietnam US$1.87bil (RM7.52bil) coal-fired thermal power plant project independent power plant (IPP) project.
Information 2
.............
https://www.researchgate.net/figure/3-Full-Investment-IRR-and-Payback-Period-of-Coal-fired-Power-Generation-Projects-under_fig4_305776583
15% IRR and 6 years payback in China
Information 3
.............
https://klse.i3investor.com/blogs/Jaks%20resources/2019-12-09-story245519-Jaks_Resources_Higher_Expected_Investment_Returns_from_JHDP.jsp
Management Guidance
Jaks' CEO Andy Ang has indicated during the recent AGM that the power purchase agreement and hence earnings estimate of JHDP was formulated on the basis of 6500 annual utilization hours.
Therefore, management guidance of 8 years payback period and 12% IRR were based on 6500 annual utilization hours.
................
Using the reverse payback methodology,
US$1.87b / 6.18 years = US$303m cashflow per year
Depreciation Expenses = US$1.87 / 25 years = US$75m per year
Profit = US$303 - US$75 = US$228m x 4.2 = RM958m
30% sharing = RM958m x 0.3 = RM287m => EPS = RM0.446
40% sharing = RM958m x 0.4 = RM383m => EPS = RM0.595
2020-03-11 11:12 | Report Abuse
well said pjseow as usual
Not only Hengyuan, Lioind..almost 80% of the listed stocks in Bursa is so vulnerable and thus has an unpredictable future earnings - up/down. Just look at Dayang...even the Financial sectors now.
Market has totally not account the stability of earnings for next 25 years.
Strange , market trusts a spike in one quarter earnings and assumes thats how it would be for the next 10 years on stocks generally...but it does not trust the PPA agreements which is binding for 25 years..just because it has not shown the first quarter earnings.
Posted by pjseow > Mar 11, 2020 10:21 AM | Report Abuse
Aseng , there are many differences between Hengyuan refinery business vs power generation business which is " protected " through the power purchase agreement. Hengyuan.business has many non.controllable variables like crack spreads, oil price fuctuations , inventory gains or lossess, periodic shutdowns and upgrades which cost a lot of money. The potential unfavourabke variables in.power plants business are mitigated through adjustmemt or compensations through PPA stated upfront.Hence , power plants earnings are mote predictable.
2020-03-10 23:42 | Report Abuse
very good idea OTB. Really appreciate this initiation.
2020-03-10 23:28 | Report Abuse
12) I will suggest to the management of Jaks to use Jaks shares listed in KLSE to swap for 10% option of Hai Duong power plant stake. No money needs to come out from Jaks and CPECC to own certain % of Jaks shares listed in KLSE in return. This will make CPECC a major shareholder of Jaks listed in KLSE. This suggestion will be a win-win situation for both Jaks and CPECC.
...........
absolutely brilliant idea - wonder is this DK66's idea? Very sharp sifu OTB...
amazing...
2020-03-10 16:21 | Report Abuse
Its a utility stock....admit it. Cash flow is real...25 years.
It will be an inevitable realization by the market soon.
2020-03-10 16:06 | Report Abuse
40% stakes is definite
300 M per annum profit is definite
25 years recurring is also definite
.......
its time for JAKS a utility stock, ignore O&G stocks, e.g Dayang which has uncertain future currently and decouple....
2020-03-10 12:30 | Report Abuse
WHO speech yesterday night had the same message below
Posted by probability > Mar 9, 2020 5:39 PM | Report Abuse
China proved it and Korea proved it - it did not take more than a month to contain the virus.
When necessary...when it gets out of control.. whichever country affected ..can & will do the same.
we are not in war against an enemy whom we do not know how to defeat.
.............................................
Those who can sell and buy cheaper are of course great - but this ability to know the 'collective psychological feeling of the market' is for the gifted in a different aspect.
But when there is a clear cut strategy to win the virus... why lose at the stock market by cutting loss?
2020-03-10 12:03 | Report Abuse
40% stakes is definite
300 M per annum profit is definite
25 years recurring is also definite
.......
its time for JAKS a utility stock, ignore O&G stocks, e.g Dayang which has uncertain future currently and decouple....
2020-03-09 17:47 | Report Abuse
There is no absolute freedom in any organized body, corporation, institution, religion or even...a country.
The moment it involves more than one person - absolute freedom is lost. Its about collective interest.
2020-03-09 17:39 | Report Abuse
China proved it and Korea proved it - it did not take more than a month to contain the virus.
When necessary...when it gets out of control.. whichever country affected ..can & will do the same.
we are not in war against an enemy whom we do not know how to defeat.
.............................................
Those who can sell and buy cheaper are of course great - but this ability to know the 'collective psychological feeling of the market' is for the gifted in a different aspect.
But when there is a clear cut strategy to win the virus... why lose at the stock market by cutting loss?
2020-03-09 17:29 | Report Abuse
what surprises me the most is that South Korean and Iran new cases had indeed been dropping. Its just a matter of time Italy experience the same with tight control.
Market totally spooked out of control...
No country will allow the virus to get out control - the virus cannot win with the 'quarantine weapon of 14 days' as proven in China.
Posted by hng33 > Mar 9, 2020 5:21 PM | Report Abuse
Dear OTB
It bad market sentiment affect all stock across the bursa, there is NOTING change on Jaks underlying business today if compared to yesterday, or week or month ago. The power plant is on track to generate electricity.
It is knee jerk reaction over failure in opec and Russian concourses on oil cut. With current tumble oil due to that, both opec and Russian will have to again back to negotiation to avoid lose-lose situation.
I believe market will soon recover from these knee jerk as no oil country can afford oil tumbling (Suadi, Russain and shale oil producer in US) that will worsen their economy.
In regard to virus, China already successful contain the spread, now the new infected people already down to 2-digit number.
The success in China virus containment is utmost important to world, if compared to itali or Korean. US also have declare state emergency to use enforcement law to speed up containment.
Every country are cooperate and serious about virus containment. Worldwide scientist are on Lab to produce antiviral speedy, on human clinical trial before mass production in near future.
Thus, please stay calm and don blame others especially those recommended good stock in these forum with fact and figure, like DK66 and OTB, both have my high respect.
2020-03-09 15:45 | Report Abuse
https://www.worldometers.info/coronavirus/
the virus cases had drastically reduced in China, followed by South Korea and now even Iran...
Once Italy is under control i dont see further rise infection rate
even oil price will recover
2020-03-09 11:28 | Report Abuse
even there is no certainty for Maybank to be around after 25 years...but JAKS will be.
2020-03-09 11:23 | Report Abuse
40% stakes is definite
300 M per annum profit is definite
25 years recurring is also definite
.......
investors waited for more than 5 years to engineer, procure and construct....its just about to generate power now.
..........
Market sentiment is often momentary
dont get hooked on temporary emotions
2020-03-09 11:21 | Report Abuse
virus has no whatsoever impact on power consumption in vietnam...
utility stock in fact a beneficiary of cheaper fuel...
2020-03-08 20:20 | Report Abuse
give a like to i3lurker for the above comment - seems quite reasonable
2020-03-08 19:26 | Report Abuse
walao.. a simple intention to make a layman understand the synchronization process became so complicated.
i suggest all stick to the below comment from pjseow and enjoy this video we will be seeing soon at Hai Duong.
1) 7-15.3.2020, unit 1 will join the grid for the first time;
2) 1-15.4.2020 will test reliability and
3) 15-15.6.2020 will operate commercially.
https://www.youtube.com/watch?v=5WZrqwtj11Y
TQ
Posted by pjseow > Mar 8, 2020 6:49 AM | Report Abuse
Probability, let me polish up my engineering knowledge in electrical. AC voltage and current are sinusoidal . The sine waves have peaks and troughs with certain wavelength and amplitude. The sinusoidal voltage and current from the new Hai Duong generators must be adjusted or sychronise such that they are in the same phases as the waves from the national greed. hahaha, I am trying my rusty engineering
2020-03-08 13:56 | Report Abuse
yes pjseow, hope it can touch RM 3000 again :)
2020-03-08 11:56 | Report Abuse
i agree - but 'start-up' its a general statement. It can be referring to the reliability test phase in May.
2020-03-08 11:35 | Report Abuse
spot on pjseow! perfectly elaborated :)
Posted by pjseow > Mar 8, 2020 6:49 AM | Report Abuse
Probability, let me polish up my engineering knowledge in electrical. AC voltage and current are sinusoidal . The sine waves have peaks and troughs with certain wavelength and amplitude. The sinusoidal voltage and current from the new Hai Duong generators must be adjusted or sychronise such that they are in the same phases as the waves from the national greed. hahaha, I am trying my rusty engineering
2020-03-08 01:37 | Report Abuse
To those who want to understand the meaning of synchronization in detail:
The grid is like one generator (composite of many generators from different plants) and the other is the new generator to be synced:
https://www.youtube.com/watch?time_continue=27&v=RGPCIypib5Q&feature=emb_logo
If two AC sources are to be connected together to form a grid, they must match each other exactly in frequency, phase, and voltage.
Its same like connecting two DC batteries in parallel - the + & - must be placed on the same side to power a light bulb.
The difference for AC power is that the polarity keeps changing alternatively.....
so sync means having to dance together with the rhythm of the National Grid.
...........................
If you understand the above , you would appreciate that its as good as COD.
2020-03-07 15:21 | Report Abuse
ok thanks Ricky Kiat. Good to ask management on Unit 2 boilers status.
2020-03-07 14:41 | Report Abuse
Note that, Synchronization means power is being supplied to the National Grid.
But in order for payment to take place from EVN, it is usual to expect certain characteristic of the power - reliability, efficiency, voltage etc...for EVN to honour the payments.
As explained by others earlier its expected that the power supplied between synchronization to COD will also get paid depending on how reliable it is.
....
may be you can ask confirmation on the above too to Mr. Andy
2020-03-07 14:34 | Report Abuse
@OTB, if you see the video on 'Unit 1 Synchronization of the CPHGC Plant' the 23 days they say is the duration between boiler ignition to synchronization to the grid which took place on 28 Dec 2018.
COD means Commercial Operation Date if i understand correctly and that will take place after reliability and performance verification in 1 or 2 months after synchronization.
The celebration is for synchronization not COD.
2020-03-07 14:23 | Report Abuse
may be they have 4 boilers - 2 boiler for each unit.
But 23 days says a lot how near we are.
2020-03-07 14:18 | Report Abuse
welcome VIN3133.
CPEC were truly amazing in Pakistan despite a challenging environment- 23 days from boiler ignition to synchronization to the Grid.
Boiler ignition was the date they fire for steam production / steam blowing they did earlier.
If you see mmk79 posting translated below - we actually have both unit boiler ignited by 28th Jan at Hai Duong.
This means, technically Hai Duong Thermal power plant can actually achieve synchronization to the grid for UNIT 2 on top UNIT 1 by June 2020.
At current level of power desperation by EVN, it is not impossible.
may be its a good question to ask Mr. Andy
Posted by mmk79 > Mar 6, 2020 11:31 PM | Report Abuse
Ignition and flushing of two boilers for Unit 1 of Vietnam Haiyang Power Plant Project completed At 14:58 local time on January 28, two 600,000-kilowatt coal-fired power plants in Vietnam, Haiyang, Vietnam, invested and constructed by China Energy Construction Investment Corporation, contracted by Southwest Institute, contracted by Anhui Power Construction Company No. 1, and technology development company. The completion of the ignition and flushing of the No. 2 boiler of Unit 1 marks the successful completion of the flushing of the two boilers of Unit 1 and laid the foundation for the complete start-up of the unit and its grid-connected power generation. The blowing work of Unit 1 started from the ignition of the No. 1 boiler burner to the successful firing of the No. 2 boiler for two consecutive blow-shooting targets, which lasted for 18 days.
The flushing range mainly includes boiler superheater tubes, low temperature reheaters, high temperature reheaters, The main steam pipe, reheating hot section pipe, reheating cold section pipe, and low side pipe are carried out in three stages. After 94 pressure reduction flushing pipes, No. 2 boiler flushing pipe was completed to a high standard.
2020-03-07 13:09 | Report Abuse
The above is scheduled within next 2-3 weeks for Hai Duong Thermal Power plant and its pathetic to see how market is treating JAKS share price.
Commercial operation date (COD) is nothing - its the Synchronization to the Grid which is the ultimate event.
2020-03-07 12:59 | Report Abuse
In Hai Duong it will appear more like this:
https://www.youtube.com/watch?v=5WZrqwtj11Y
2020-03-07 12:52 | Report Abuse
synchronization to the grid is such a critical event to celebrate:
Below shows 750MW in 2003 - with old fashioned control panels (when you dont have advanced PLC, DCS control system like we have for Hai Duong)
https://www.youtube.com/watch?v=Zw39gxIqfVU
2020-03-06 21:48 | Report Abuse
root cause is Tun - fullstop
he became the creator and destroyer
2020-03-06 21:46 | Report Abuse
it has tremendous implications:
- AG Thomas resigned
- Lateefa resigned
- Najib and Zahid feels they are no longer prosecutable
- Justo left malaysia
- Sedition act were never removed
- Death penalty were never removed
- 1MDB trial will never conclude together with Altantuya case
- Rakyat who spent so much energy to vote will no longer feel any meaning in voting
Instead they may ban liquor shops and 'sexy dress' in public etc...
seriously hopeless country
(not sure how to motivate myself - frankly)
.......
I am predicting more covid cases in Malaysia as we may have as good as Iran government here
2020-03-06 16:15 | Report Abuse
7.5% increase in national consumption load means, an increase of 10.7 Billion kwH.
While supply drops by 3.1 Billion kwH from Hydropower.
Net shortfall = 13.8 Billion kwH
.................................
2020-03-06 16:05 | Report Abuse
Hydropower is in shortage of over 3 billion kWh compared to the same period in 2019
4th March 2020
https://www.evn.com.vn/d6/news/Thuy-dien-thieu-hut-hon-3-ty-kWh-so-voi-cung-ky-2019-6-12-25175.aspx
Hydropower is in shortage of over 3 billion kWh compared to the same period in 2019.
The electricity supply from March to the end of the dry season 2020 is forecasted to face many difficulties. Up to the beginning of March 2020, hydroelectric reservoirs are having water level from 5m to 24m lower than the same period last year. The total amount of water in hydroelectric reservoirs is lower than 7.47 billion m3, equivalent to 3.15 billion kWh.
..............
Since water is poor in hydroelectric reservoirs, mobilization from coal and gas thermo-electricity plays an important role in ensuring electricity supply in the dry season as well as the whole 2020.
In the first 2 months of the year, although many production, business and service sectors were affected by COVID-19, the national consumption load increased by 7.5% compared to the same period in 2019
2020-03-06 14:55 | Report Abuse
i understand & feel every single bit of what you said here pjseow
my small plantation had just began to fruit....yield & current FFB price is still not sufficient to break-even maintenance cost
Posted by pjseow > Mar 6, 2020 2:26 PM | Report Abuse
Investing in.power plant business is like investing in oil palms. It will take 4 to 5 years for the oil palm.trees to bear fruits. During.the period of 4 to 5 years, there is no income but expenses to put fertilizers and clear the weeds. You will also see palm oil prices swing.up and down, drought, flood or sunshine. You dont sell your plantatiion half way whenever you see the market swings or political issues. This is the type of perseverance and mentality you need for long term investment .One thing you know for sure when you see the trees grow taller and start to flower , money and wealth.is coming .Not many can wait so long and has the patience . Can you see Hai Doung.power plant start to flower??
2020-03-05 00:08 | Report Abuse
@siongkhoon, please refer DK66 article 'Jaks Resources - A Wild Estimate Based On Abbreviated Results' - its from an exact identical plant with similar contract just started operation about a year ago.
2020-03-04 23:19 | Report Abuse
they are not smarter than you Flintstones - to get convinced on the earnings projected...
2020-03-04 23:03 | Report Abuse
Its ironic that at such record low level Interest Rate from Central Banks, market had given such low PE to stocks in Bursa due to extreme pessimism/uncertainty.
A low PE is justified on a stock with a high uncertainty of future earnings - due to perceived risk. As market uses a greater discount factor.
This is justified for country with political instability and general decline in productivity growth - GDP. This is true for Malaysian local businesses now..including Banks.
However:
........
(1) JAKS is not a local company.
JAKS should not be treated as a local company when JAKS power plant is a foreign business in one of the most rapidly growing economy - Vietnam.
(2) JAKS is not in a vulnerable sector in a declining economy.
Market is being blind now as it has not screened JAKS out as a utility sector from other vulnerable sectors in a declining economy.
(3) JAKS is a utility stock with a BOT contract with high degree of certainty in profitability.
The BOT contract assures a stable recurring income for next 25 years.
.............
As such,
JAKS should not be trading at PE lesser than 10 at any point in time.
Given a dividend payout policy of say 50% in the future...the PE should not be anything lesser than 15 (at such low interest rate environment).
2020-03-04 10:48 | Report Abuse
nobody provided cosmetic data here.....should really appreciate to have DK66 . Only with his sharing you will have an edge over the IB.
Else, IB will wallop first and give TP after it reaches close to fair value later.
I must remind: DK66 is sharing truly precious information
............
posted by busyweekly8888 > Mar 4, 2020 10:33 AM | Report Abuse
ok thanks to probability. I respect him at least he also point out good and bad sides. unlike someone keep telling good sides and provide cosmetic data and target price.
2020-03-04 10:26 | Report Abuse
MFCB is on the same region ma.....same business concept and pricing..
go through articles from DK66 - comparison done with Mong Duong 2 and Vinh Tan 1...
These are exact apple to apple comparison..planted on the same soil....
Posted by busyweekly8888 > Mar 4, 2020 10:23 AM | Report Abuse
thanks probability.
We can take Mudajaya as reference. Why must take MFCB?
2020-03-04 10:21 | Report Abuse
on Public invest article...these were my comments earlier.
Posted by probability > Feb 28, 2020 12:56 PM | Report Abuse X
we understand that the completion of its first unit which was initially thought to be by end-2019 is now postponed due to Covid-19. The commercial operation date (COD) is now targeted for 3QFY20,
............
since when was the commercial operation targeted end 2019?
The placement to the grid is as always as planned Mid March 20 and commercial operation by May/June 2020.
How the heck coronavirus can have effects on a targetted operation end of 2019 when it only came to know early 2020?
How can coronavirus effect scheduled plant operation? Vietnam is one of the best country in terms of control placed and the infections there had become nil for sometime.
exploitative and misleading justification from PB
2020-03-04 10:19 | Report Abuse
busyweekly...impart u some process plant knowledge...
maintenance costs happen after operation...
start up costs happen before operation....
start up costs are peanuts here...just the coal which was burnt but unutilized for power generation...thats like 2-3 days of operating cost.....
and by the way....its fuel cost passed through mechanism for BOT.
TQ
2020-03-03 20:39 | Report Abuse
@liewtz06, i think you can see it this way from the below data:
.......................................................
Vinh Tan 1 is 55% owned by China Southern Power Grid
The PATNCI of China Southern Power Grid for 9 months ended 30th Sept 2019 was RMB 1,127m ( 9 months 2018 : RMB754m)
The PATNCI of China Southern Power Grid for 2018 which is attributable to Vinh Tan 1 was RMB56m
.......................................................
PATNCI of China Southern Power Grid for 9 months ended 30-09-2019
RMB 1,127m...(1)
PATNCI of China Southern Power Grid for the last 9 months in 2018 ended 31-12-2018:
RMB 754m
Deduct the RM45m contributed by Vinh Tan 1 at end of 2018
RMB 709m.....(2)
As such, (2) is without Vinh Tan 1 contribution and (1) is with Vinh Tan 1 contribution for a 9 months period (with +/- potential contribution from others which is assumed zero - which is a fair neutral assumption).
The changes , i,e difference between (2) & (1) is then the PATNCI from Vinh Tan 1 contribution for 9 months = RMB 418m
12 months prorated contribution would be = RMB 557m
Since PATNCI holds 45% stakes, at 100% stakes Vinh Tan 1 PAT would be:
= (100/45)*(RMB 557m)
= RMB 1238m
= RM 743m
at JAKS 30% and 40% stakes it would be RM 222m and RM 297m respectively.
correct if my understanding is wrong DK66 :)
2020-03-03 15:38 | Report Abuse
above derivations appears highly consistent with Mong duong performance and also based on IRR and payback estimation given by Jaks management earlier.
Its a 'Jackpot stock' which the market yet to appreciate despite so close to power generation...
we cant predict market's behaviour in the near term.....but 'time' is an inevitable force we can count on to push the market in the right direction.
2020-03-03 11:20 | Report Abuse
1) 7-15.3.2020, unit 1 will join the grid for the first time;
2) 1-15.4.2020 will test reliability and
3) May 15 - 15.6.2020 will operate commercially.
..........
(3) means selling the electricity. For (2) there were news earlier saying they can get paid during this phase too. On (1), i doubt.
So, Q2 20' may show some revenue recognization from power sales - not in Q1 20'
2020-03-02 10:45 | Report Abuse
at 93% completion its not impossible for Unit 2 to be placed to the grid much earlier almost simultaneously with unit 1 COD.
After all EVN is hungry for it.
2020-03-02 10:36 | Report Abuse
EVN is so desperate that they are even eyeing power from start up / reliability phase.
Trust Hai Duong power plant will get paid as early as March itself if things goes as scheduled.
Stock: [JAKS]: JAKS RESOURCES BERHAD
2020-03-12 00:14 | Report Abuse
Crucial information 5 to experience 1-4 above
.............................................
Posted by hng33 > Feb 4, 2020 2:21 PM | Report Abuse
Now, justified again jaks current situation
1. Power plant for unit 1 already FULLY completed
2. Power plant unit 2 is 95% completed.