Steady and surely to RM7.00

https://klse.i3investor.com/web/blog/detail/dragon328/2023-01-09-story-h-301837353-Genm_Genting_Catching_up_with_Regional_Peers

https://klse.i3investor.com/web/blog/detail/dragon328/2023-01-09-story-h-301837353-Genm_Genting_Catching_up_with_Regional_Peers

Genm re-rating in progress

Good analysis by Bettyem.

VT has got over RM120 million cash from disposing of 440 million shares in BCorp, there is still plenty of room for him and BJLand to increase stakes in SEM.

For now, Genm may just focus on the upcoming tender from Thailand, closer to home

Fortunebull777, agree with you that it was better for Genm to let go Macau last year as the Macua gaming market is still weak and operators there may be in for another year of losing, some more required to commit at least US$2.5-3.0 billion or capex over next few years.

I think Genm has done some goodwill with the Macau authority / selection committee by participating in the bid. I wouldn't be surprise if Genm puts in an unsolicited bid later this year or next for a new gaming license there, just to put in more competition to the 6 incumbents and to add tax & gaming revenue to Macau authority

If HMTM gets the approval, it can market at just US$10,000 per patient per year for the mass market. US alone has 6.5 million Alzheimer patients currently, there should not be a big problem for TauRx to get at least 15% of these mass market patients if marketed at US$10,000 per patient per year, or 60% discount to Lecanemab. Potential revenue will be:
US$10,000 x 1.0 million = US$10 billion a year

When TauRx revenue is that big, then EBITDA margin would be as high as 50% like that of Pfizer, so TauRx would achieve EBITDA of US$5.0 billion a year, and Genting's share of profit would be US$1.0 billion a year!

TauRx would be valued at easily 6 x EBITDA or US$30 billion, double of the valuation in my article.

Lecanemab is not getting full coverage by CMS, so will not be a drug for the mass market. Furthermore, it will market at US$26,500 per patient per year, so expensive!

Lecanemab with potential brain swelling effect and even death can be approved by the FDA, why can't HMTM of TauRx with no obvious side effect?? If TauRx applies for Accelerated Approval from US FDA later this month, there should be no issue of getting approval by end 2023 or latest mid 2024, right?

Actually I may have under-calculated the effective stake of Genm in the new listing Genting US. When Genm & Kien Huat inject the first 30% stakes of Empire Resorts into the new listing at US$1.0 billion, then inject the remaining 70% at US$7.7b, the total paid-up of Genting US would be just US$(6+1+7.7+1) = US$15.7b, so Empire Resorts should have an effective stake of 7.7/15.7 = 49% and not 43% as miscalculated in the article. Hence Genm should have an effective stake of 49% * 76.3% = 37.4% in Genting US.

Genting US would then re-rate up from US$15.7b to US$18.0b, giving some 15% upside to investors in the new listing entity.

Genm hitting 3.77 should not be an issue once Resorts World New York City clears the huddle of community support for a full scale casino at Queens

still good closing today, considering the decent gains in past 2 days. Profit taking has been well adsorbed

https://klse.i3investor.com/web/blog/detail/dragon328/2023-01-06-story-h-301897649-Genting_Bhd_Strikes_Gold_in_the_US

food for thought over lunch

https://klse.i3investor.com/web/blog/detail/dragon328/2023-01-06-story-h-301897649-Genting_Bhd_Strikes_Gold_in_the_US

food for thoughts over lunch

How good is it?
What can this new guy do with SEM?
What sort of corporate exercises would he bring along to add value to SEM?

Anwar's former political secretary as SEM chairman, is this a good thing or a bad thing?

What is the game plan of VT?

IGBB earnings are at low level now as it is saddled with high debts and high interest expenses, and also high depreciation charges. Once Mid Valley Southkey JB and the new hotels / office towers are injected into REIT, then IGBB will be freed up from high interest expenses and depreciation charges.

I prefer IGBB to IGB REIT, as IGBB will have higher upside as it embarks on the corporate exercises as mentioned in my article. IGB REIT has the advantage of giving higher dividend yields now at about 5% p.a. but share price may not have much upside as interest rates go up.

Those other new data centre projects announced recently in Johor will mostly be powered by solar power, same as the one started by YTL Power in Kulai. Of course, everyone would love to get into this business, whether TNB or Johor state government or other IPPs, but a developer of such green data centre must have deep pockets, expertise in power generation, expertise in construction of data centre park and international connection to MNCs that require huge data centre.

YTLPower has all these credentials, being in nett cash position at holding level, with over 20 years of power generation experience and hundreds of power plant engineers in Malaysia and Singapore, with over 65 years of construction experience and with good relationship with MNCs like SEA.

More importantly YTLPower has the first mover advantage and has already secured sufficient land in Johor for growing the data centre park for next 8-10 years.

@tonywong8, right now TNB is the only electricity supplier in this country, so naturally it supplies electricity to all the other data centres in Johor and other parts of the country. I do not think TNB supplies electricity to data centres at a lower tariff, it is more of the case of these data centres subscribing for the GET programme and pay a premium tariff in order to get a green certificate as what hng33 stated above.

The RM27 billion government subsidy you mentioned above was the fuel subsidy our government agreed to pay to TNB for not raising electricity tariffs when energy costs (coal prices, gas & oil prices) escalated via the Fuel Cost Inbalance Mechanism. That is supposed to make good on TNB costs so that it would not suffer huge losses, but has taken a big toll on government finance as fuel prices remain at elevated levels.

You need to understand that the government finance is tight, same as TNB's. The receivables sitting on TNB balance sheet are going up by billions every quarter, those are the fuel subsidies committed to be paid by the government to TNB but not yet paid. So this poses a huge risk to TNB in the event the government is not able to pay the fuel subsidy in time.

Happy New Year to all of you! Wish you good health and prosperity in 2023.

Also wish for YTL Power to double in share price in the new year.

The potential earnings contribution from this pilot project could be tremendous. Lets assume an average case:

With battery solution to support 100MW power export to Singapore at 80% of the time, and battery solution costs about 4.0 sen/kWh and export tariff at 15% discount to Singapore tariff (Energy Cost), then potential gross profit from this pilot project would be:
100 MW x 1,000 x 8,760h x 80% x RM(0.40 -0.61*15% - 0.04)/kWh = RM188 million a year

A maximum scenario would have an annual gross profit in excess of RM300 million a year

Though the retail electricity tariff in Singapore for Q4 2022 was 31.82 cents per kWh, we need to take out the Network Costs, Market Support Services Fee and Power System Operation and Market Admin costs which made up about 40% of the total tariff. This is bcoz the solar power import from Malaysia will need to be charged the above three component fees on top of the energy costs.

Even so, if we compared the solar power generating costs of less than RM0.1768 per kWh to the Energy Cost component of Singapore tariff of 19 cents per kWh or about RM0.61 per kWh, the gross profit margin to such solar power export will be tremendous at RM0.434 per kWh. Even after we deduct the electricity transmission costs from Kulai to Singapore (which is a relatively short distance), estimated at 3.0 sen/kWh, the gross margin would still come to almost 40 sen per kWh.

This is much higher than the razor thin profit margin earned by LSS4 bidders, many of them cannot pull off the solar projects here after the costs of solar panels escalated in past few months after they won the bid.

This clearly demonstrates the strength of YTL Power in securing lucrative projects, and YTL is prepared to walk away from fiercely competitive projects with thin margin so as not to tie up huge capital on risky projects.

Well said Observatory. Good luck with Daibochi!

I shall only revisit when Lim makes its next move and shows his tail.

Pinky, you will be rewarded handsomely for holding on for next 12-18 months

Oh the big buyer turned out to be Tan Sri VT, instead of BJLand who became a substantial shareholder with slightly over 5% stakes in SEM on 15th Dec 2022.

VT is increasing his stakes in SEM despite having some 41% stakes, plus BJLand's 5% and SEM's company share buyback 10%.

He must know that SEM is grossly undervalued at current prices, or a big good news is coming soon. Either way I see SEM's share price easily surpassing previous high of RM2.40 in coming weeks.

@AngTayKor, did TauRX mention when they would apply for regulatory approval for their HMTM? and when they would target the first regulatory approval to be obtained from US FDA, UK or Canada authority??

good closing today!
Volume exceeds 1.0 million. Big buyer at last minute again. Suspected to be BJLand.

I would make a small correction to my calculation earlier in the article:

For 1.5 million visitors a year to Niseko, it will need 12,500 rooms to accommodate them at 33% occupancy if each stays for only 1 night. If average stay is 2 nights, then it will need 25,000 rooms at 33% occupancy, and average stay is 3 nights, then it will need 37,500 rooms for these 1.5 million visitors at 33% occupancy.

christmas comes early

pang72 is back, a new rally is starting now

@wallstreetrookieNEW, you were chun chun in your call 2 weeks ago

True that it is just paper gain sitting on the balance sheet, but at least it shows how deep value these assets are. The high value of the assets could be used as security for getting big amounts of loans for future expansion, and it demonstrates the high credibility of the group which may enable it to get cheaper financing easier.

Just like when you own an old bungalow house sitting on a large tract of freehold land at a highly sought-after location, you do not have to sell it but you can use it to obtain good financing for your other investments while riding on its future capital appreciation.

We cannot discount the possibility of YTL disposing some of the non-core assets when the price is right.

FYI, YTL disposed off a small piece of land at Genting in Aug 2021 for RM403 million, booking in a handsome profit of RM306 million.

YTL also sold off its stakes in Dama Cement plant in China in June 2021 for RM570 million, booking in a good profit of RM447 million.

YTL Power in Feb 2022 disposed off its 33% stakes in Electranet Australia for RM3.066 billion, booking in a profit of RM2.2 billion.

Remarkable achievement by YTL group. The land value of the properties owned by YTL in Bukit Bintang may be way higher than the properties themselves. YTL group arguably owns the largest tracts of land there with Lot10, Starhill shopping gallery, JW Marriot hotel, Ritz-Carlton Hotel & Residences, YTL new and old office towers.
If I use a land size of 5 acres owned by YTL there, the land itself in Bukit Bintang is worth over RM1.5 billion.

If you have large positions in Daibochi, then it may be difficult to sell in the open market as the counter is illiquid. You may rely on other substantial shareholders like Apollo and Samarang to negotiate for a better pricing when Scientex makes a second attempt to privatise Daibochi.

Another sign that I do not like to see is that Daibochi stopped its quarterly investor presentation session after Scientex came in. So you will not know what is going on in the company, and Daibochi management is not allowed to release any information not favourable to Scientex's bigger agenda of privatising it. Information flow will be limited and controlled, and I suspect Daibochi management and business strategy in near term will be impacted and aligned to Scientex's agenda, i.e. Daibochi will not embark on aggressive expansion or at least will not report any good earnings until Scientex successfully privatise it at low price.
What is the point of holding onto Daibochi shares?
Better switch to other better managed companies with long term growth potential and good corporate governance, where major shareholders' interests are aligned with minorities.

@observatory, I am surprised that you are still holding on to Daibochi shares after the failed privatisation attempt by Scientex last year. I sold off mine before the privatisation exercise concluded as we already concluded that the privatisation attempt would fail well before it ended.

I did not like the privatisation attempt by Scientex, more so on its offered price which clearly undermined the business prospects of Daibochi. But the bigger concern to me was for Scientex management to come into Daibochi, as Scientex was pretty much a china man company with not much corporate governance. I was skeptical of what synergy Scientex could bring to Daibochi with its commodity-like stretched film business, and I thought it would be more of a case for Scientex to extract value from Daibochi to benefit its own larger stretched film business.

And now things have become clearer and most of concerns have turned out to be true, i.e. Scientex single-handedly rejected the motion of Daibochi to adopt the best practice on corporate governance, and lowered the dividend policy to just 30%.

From these moves, I can reasonably expect that Scientex is not done yet with Daibochi and will not do anything good to add value to Daibochi. It may make another offer to acquire the remaining 23% minority stakes in Daibochi at similar price of RM2.70 or even lower. Scientex is doing all these maneuvers to frustrate the minority shareholders of Daibochi so that they will sell out to Scientex later at a low price.

You do not expect Scientex to inject its stretched film business into Daibochi as it is much larger than Daibochi, it will be more likely for Scientex to privatise Daibochi then inject it into a spin off listing of all its packaging businesses. Scientex will privatise Daibochi at RM2.70 or lower then inject it into the new listing at RM3.00 or much higher. This is typical china man thinking of doing corporate exercises, to benefit only himself.

I would recommend you to gradually exit this Daibochi as I do not think you can benefit anything from its future potential, as Scientex will try to reap off all the benefits first and deprive you of such potential.

10bagger10, I understand that YTLP has already received the cash from the disposal of Electranet. That is when I saw its net debt reduced by over RM2.0 billion as of 30 June 2022

Singapore has a population of about 7 million residents, which is smaller than that of Malaysia. But it has huge industrial base and commercial users of electricity. Being smaller does not mean that Singapore cannot produce localised or regional champions.

We have seen that Singapore banks like DBS, UOB or OCBC earning much higher earnings than Malaysian banks. You have Singtel which has much higher market cap than TM here. The electricity market in Singapore can certainly accommodate 5-7 key players earning decent returns on their investments.

Weaker player like Tuaspring/Hyflux will be wiped out or taken over by the stronger one if they do not manage their cashflows well, and invest at the wrong time of the cycle.

Calvin, agree with you that most plantation companies will do very well when CPO is about RM4000 per tonne now. I do like BPlant which is grossly undervalued due to its large tracts of plantation land suitable for commercial or industrial development.

YTL Corp should be worth RM0.90-1.00 when it starts declaring dividends of 5.0 sen from FY2023, and worth at least RM2.00 when it is able to declare dividends of over 10 sen from FY2025. That's my projections.

for those interested in knowing more about the power business in Singapore, can read this at your leisure

https://klse.i3investor.com/web/blog/detail/dragon328/2022-12-06-story-h-303952239-YTL_Power_the_Rising_Power_in_Singapore

for those interested in knowing more about YTL Power business in Singapore

https://klse.i3investor.com/web/blog/detail/dragon328/2022-12-06-story-h-303952239-YTL_Power_the_Rising_Power_in_Singapore

for those interested in knowing more about YTL power business

https://klse.i3investor.com/web/blog/detail/dragon328/2022-12-06-story-h-303952239-YTL_Power_the_Rising_Power_in_Singapore

for those interested in knowing more about the power business

https://klse.i3investor.com/web/blog/detail/dragon328/2022-12-06-story-h-303952239-YTL_Power_the_Rising_Power_in_Singapore

https://klse.i3investor.com/web/blog/detail/dragon328/2022-12-06-story-h-303952239-YTL_Power_the_Rising_Power_in_Singapore

For your leisure read

@10bagger10, as I estimated before, YTL Power had a net debt of RM0.8 billion at the holding level after deducting off those debts ring-fenced at subsidiary levels (est. RM12.8bn in Wessex, RM5.4 bn in PowerSeraya, RM1.5 bn at Attarat Power).

After the disposal of Electranet, YTLPI has received about RM2.0 billion of cash and hence has turned into a net cash position at the holding company level with net cash of about RM1.2 billion, based on my own estimation.

@Observatory, you are probably right that Wellcall may have fully impaired its investment in the JV with Trelleborg, which is a disappointment.

The good thing is that the amount of investment is not big.

Agree that Wellcall's growth will be tepid in near term, as the JV does not take off.

Will need to wait for other JV or breakthrough in technology for the next quantum leap in growth

I have over-estimated the positive effect of weak ringgit and lower input costs.

Apparently the management chose to pass on the benefits of lower input costs and weaker ringgit to the customers in order to retain long term customers.

Earnings would have increased by 4% y-on-y if not for a one-off impairment loss. Good thing is this impairment is non cash, with operating cashflows remain strong at RM38.9 million for the year, and net cash holding of RM62 million with no debt.