Lagenda fundamentals strongly supported by dividend > 7% and valuation PE 4x is super attractive now

Lagenda fundamental is strong especially with 1500 acres landbank in Johor, a primary beneficial to mushroom data center, RTS, ARS, HSR etc. Other diversified primary landbank situated in Perak and Selangor

Emerging Foreign/local fund manager under accumulation phase vs. Easing EPF and KWP under distribution phase

Foreign/local fund manager vs. EPF and KWP

Share should recover back gradually just alike what happen to earlier hiccup CTOS

Good, recover back above RM 1.00

Even major shareholder under investigation, but the company other director already take over his role. Lagenda fundamental remain intact, dividend > 7% and valuation PE 4x is super attractive now

Lagenda company have numerous landbank across 4 states in Malaysia

bought lagenda at 88-90sen

KWP like EPF, keen to dispose shares in open market, but, KWP external fund manager on contradict keen to acquire myeg share in open market albeit at smaller volume.

sold back at 2.93-2.95

added more msc at 2.85

bought msc at 2.83

:D)

swap more capital to myeg at 1.04

sold first at 2.02-2.06, wait for next Q

Be patient

PBA repprted EPS = 4.34sen, below expectation. There reason is due to earlier planned water disruption for almost entire Penang in Jan for 96 hour and subsequently unplanned water outrage 48 hour happened in Jan 2024.

Therefore, affected water sale revenues. The administration and cost of sale also increase due to abobe water disruption as PBA need to provide free water supply via jumbo water tank to meet residents water consumption. The significance cost also recorded to replace valve and pipeline during these period.

In additional, current period may only able to record 1 month domestic traffic hike instead of 2 month as projected. These is because PBA adpot bimonthly water billing instead of montly.

In short, PBA real traffic impact will be more reflected in next Q result. PBA free cash holding continue increase with increase concession like, recession proof water business.

GST rather than SST meant to close the gap between revenue and expenditure

GST is fairness tax system as it apply to all consumer and easiest tax system for efficient tax collection and monitoring

EPF amd KWP so desperate to limit myeg momentum with intention wish to keep contra trading....

Ranhill - new water rate structure is RM1.05 per cubic metre for those who use 20 per cubic metre, up from 80 sen, increase 20.5sen or 31%. For usage from 20 cubic metres to 35 cubic metres, the price has increased from RM2 to RM2.35 per cubic metre, increase 35sen or 17.5%. For water consumption exceeding 35 cubic metres, the new rate will change from RM3 to RM3.15 per cubic metre, increase 15sen or 5%.

PBA - new water rates for Penang to be 62sen per cubic metre for those who use 20 per cubic metre and below a month, increase significantly 40sen or 180% from old rate 22sen per cubic metre. Those who use 20 to 35 cubic metre will be charged RM1.17 per cubic metre, increase significantly 69sen or 143% from old rate 48sen per cubic metre. and those exceeding 35 cubic metres will be charged RM2.07 per cubic metres, increase significantly RM 1.39 or 200% from old rate 68sen per cubic metres.

Remark: New traffic rate impact on PBA profit margin is significantly much higher than Ranhill

PBA profitability and valuation is much more better than Ranhill

:D)

Technology, Property, and Construction - Penang- Silicon Hub of ASEAN
https://klse.i3investor.com/web/blog/detail/rhbinvest/2024-05-09-story-h-181842088-Technology_Property_and_Construction_Penang_Silicon_Hub_of_ASEAN

Remark: Penang water consumption is expected to growth from 877MLD in 2023 to 1500MLD in 2030.

PBA revenue growth is compounded propel by both increase water sold + water traffic hike every 3 year review

Caution about Ranhill for risk of debt provision to Federal gov control PAAB

In April 2023, PAAB has notified Ranhill SAJ on the rejection of Ranhill SAJ application for moratorium on partial lease rental for 2022-2023.

Beside, PAAB, via letter dated 15 May 2023 inform Ranhill SAJ it will charge late payment intereswt on outstanding lease payment begin from 1 June 2023 at rate 6.65% pa

On 25 oct 2023, Ranhill SAJ received demand letter from PAAB in relation to partial lease rental for 2022-2023amounting to RM 95.1 m (Source: Ranhill annual report 2023, page 147)

In April 2023, PAAB has notified Ranhill SAJ on the rejection of Ranhill SAJ application for moratorium on partial lease rental for 2022-2023.

Beside, PAAB, via letter dated 15 May 2023 inform Ranhill SAJ it will charge late payment intereswt on outstanding lease payment begin from 1 June 2023 at rate 6.65% pa

On 25 oct 2023, Ranhill SAJ received demand letter from PAAB in relation to partial lease rental for 2022-2023amounting to RM 95.1 m (Source: Ranhill annual report 2023, page 147)

dragon328
All state now operates under assets light business model. All state water assets now transfer to Federal PAAB which in turn leaseback these water assets to state water operator like PBA, Ranhill SAJ. These state water operator are task to focus on operating these water treatment assets, pipeline, maintain and collect water traffic fee from customer to repay back lease to PAAB under 45 year leaseback arrangement.

Under 45 leaseback arrangement, PAAB charge interest 6% and incur escalating 2.5% fees on outstanding on state operator. The repayment amount varies dependent amount of water assets acquire by PAAB. For Penang, PAAB acquire assets total RM 660m, and PBA repayment is about RM 14.5 m pa since 2009. These repayment amount will increase if PPAB fund to require to built additional new water assets for Penang. The principal amount repayment PBA pay lease to PAAB have since increase to RM 16.5m pa.

Under arrangement, state operator have first right option to use its own fund to built additional water asset or secure fund from banking if their interest cost is less than PAAB. Therefore, PAB need increase water traffic to increase its profitability and cash to fund new water asset instead of solely rely on PAAB funding.

While PBA gradually stand firm financially with net cash position, another water operator Ranhill SAJ have seek moratorium from PAAB since 2021. It have since continued opt only partial lease rental to PAAB in 2022 and 2023 till now.

With less capex forward, PBA afford to opt much more higher cash dividend payout forward

Perak penang water transfer have change from raw water to treated water. Therefore, PBA needless to built new water treatment plant to process raw water. These massive capex will alleviate PBA cash hoard forward. PBA only need to lay new pipeline to connect Perak water treatment plant to Penang mainland seberang prai, which free up existing PBA own water capacity to focus supply water to its island Penang.

With direct transfer treated water fro Perak instead of raw water, Penang water traffic will hike much more higher forward.

Penang has unveiled several crucial initiatives focused on strengthening the state's position as a global economic leader in three key sectors: trade, technology, and tourism.... More water needed....

Chow also revealed that the federal government has given the greenlight for the Kerian Integrated Green Industrial Park to supply surplus water from the park to Penang - - - - > source treated water fom Perak - - ->
higher Penang water traffic rate in next 3 year review

Momentum to breakout RM 1.00 :D)

heading to breakout RM 1.00 resistance level soon

It is matter of battle between oversea fund vs. local EPF/KWP

Compared between PBA and RANHILL, PBA strategy is more focus on capex increase water treatment plant capacity to increase treated water supply to meet ever increasing Penang water consumption. Many penang land are consider heritage area, therefore, limit opex on pipe replacement effort.

On the other hand, RANHILL strategy is more focus on opex to aggressively pipe replacement, incur very high cost to meet targeted non revenue water%.

Dragon328
I expect much higher revenue increase than RM 100m as Penang water consumption just surge new high recently, and higher water consumption is at higher traffic band category at RM 2.07 per m3 which is increase RM1.37 per m3 hike compared to lower band category 50sen per m3 hike.

Increase revenue through traffic hike is direct increase profit earning. The surge in profit allow higher capital to fund capex such as increase water treatment capacity, built new water treatment plant to meet increase water demand which is expect to leap up by another 30% by 2030. The surge in water demand in turn increase higher revenue to PBA. It's win win cycle to generate additional positive cash flow. Of course new and additional water treatment assets subject to annual depreciation review

Indonesia is available by these year 2024. Others on track to be ready by 2025 before Ztrade become mandatory for all export goods to china

Malaysia prepares to welcome Chinese Premier Li Qiang as countries mark 50 years of bilateral ties. MYEG’s Ztrade, which streamlines the export of goods to China and is slated for official launch in 2QFY24.It could mark commencement MYEG ZTrade cross border trade between China and Malaysia. This follows the agreement of the e-government service provider with China Customs’
wholly owned agency East Logistic-Link to jointly provide a full suite of cross-border trade facilitation services that include certificates of origin on the Zetrix blockchain platform

https://www.chinapress.com.my/20240502/%e5%80%aa%e5%8f%af%e6%95%8f%ef%bc%9a%e6%9c%9f%e5%be%85%e6%9d%8e%e5%bc%ba%e8%ae%bf%e9%a9%ac-%e5%ae%a3%e5%b8%83%e4%ba%88%e5%a4%a7%e9%a9%ac30%e5%a4%a9%e5%85%8d%e7%ad%be/

These additional RM 146.8 m pa due to domestic water traffic is to

1. Decrease water subsidy significantly
2. Opex - To cope higher operation cost such as pipe replacement
3. Capex - To fund expansion capacity on exiting water treatment capacity and to built new water treatment plant

Remark: The amount spend on Capex will NOT affect PBA profit margin, therefore, all water traffic hike will direct positive to bottom-line, increase profit margin directly. The profit earn then channel to fund capacity assets and built additional water treatment plant which will record as additional new assets to PBA.

Only amount spend on opex such as pipe replacement will affect PBA profit margin, the higher rate of old pipe replacement to new pipe translate directly to increase operation cost, therefore decrease profit margin from above water traffic hike

Based on PBA latest annual report, PBA bear subsidy RM 115.2m for Penang domestic water user. Management expect to decrease these subsidy significantly following 1 Feb water traffic hike.

There are total 593,255 domestic account and 461,350 consume < 35m3, while balance 131,905 consume > 35m3
Based on new water traffic,
1. domestic account water consumption < 35m3 charge 86sen, is 50sen hike per m3
Water bill increase 50sen x 35m3 = hike RM 17.5/account
Total domestic account 461,350 x RM 17.5 = RM 8.07 million/month

2. domestic account water consumption > 35m3 charge RM 2.07, is RM 1.39 hike per m3
Water bill increase 50sen x first 35m3 = hike RM 17.5/account
Water bill increase RM 1.39 x (35m3 - 45m3)= hike RM 13.9/account
Total domestic account 131,905 x (RM 17.6 + RM 13.9) = RM 4.15 million/month

In total water traffic hike impact RM 8.07 + RM 4.15 = RM 12.22 million per month or Quarterly hike RM 36.7 million or Hike RM 146.8m pa

Remark: To arrive above calculation，
1. assumption is make for maximum consumption up to 35m3 for those consume categori <35m3, by assume all consume 35m3
2. assumption is made for minimum consumption above 35m3 for those consume categori > 35m3 by assume all consume additional 10m3
3. assumption is made to exclude domestic bulk meter whom stay in high rise apartment in which bulk meter water traffic hike flat rate at 35sen m3 have increase significantly to charge flat rate RM 1.73 m3 (its massive hike RM 1.38 per m3)

Myeg new service, e testing, JPJ computerised test (KPP) Part 1
https://www.myeg.com.my/jpj-test-site

Myeg should make bursa announcement on full commercial launch of e testing to commence from April 2024 instead of announce it through latest annual report release today (annual report part 3, page 49)

the Group commenced the pilot phase of the MYEG Drive Testing System (“ MYDTS”) and following its successful implementation, JPJ subsequently gave the green light for the full commercial launch of automated driving tests, or e-Testing, to commence from April 2024. - - - - myeg latest annual report

sold at 75-75.5sen

cut at 45sen

sold at 1.42-1.43

added more mye at 91sen

added more at 1.88-1.98