YTL Communications deploys Gigawire Terragraph technology aiding Penang's Smart State initiative

http://www.ytlcommunity.com/commnews/shownews.asp?newsid=124&category=top

Wessex Water's bustling Marketplace, three months on

https://wwtonline.co.uk/features/wessex-waters-bustling-marketplace-three-months-on

https://www.thestar.com.my/business/business-news/2020/01/17/crude-palm-oil-prices-expected-to-stay-firm

The profitability of power plant is determine by internal rate return on total cost of investment.

In Jordan shale oil power plant, the total cost is USD 2.1 billion (RM 8.6 billion), the internal rate return is 15% + additional IRR at least 5% from the plant come together with right to own oil shale mining operation that accompanies the plant. These is additional lucrative source of income + 30 year concession period, with further option to extend another 10year to up 40 year concession.

With such long concession agreement 40 year, and payback time is only at such shorter time of 11 year settle off ALL cost USD 2.1 billion. YTLP therefore have option to refinance these exiting 15 loan tenure to matched entire 40 year concession, monetize much higher profit

.....“The financing is only for 15 years. This includes about four years for construction. That means this project will be able to pay off the debt in about 11 years. After that, everything will be free cash flow,” explains Yeoh.

YTL Power will, in turn, look for ways to unlock value for shareholders using the predictable cash flow from Attarat — perhaps via debt refinancing or by monetising equity, he says...

Another strong point toward how lucrative profitability are the tenure of borrowing. In YTLp, the tenure borrowing only 15year including 4 year construction period. With 30 year concession period, it only need 11 year to fully repay ALL the cost of funding on both equity (25% cost of investment funding) and bank borrowing (75% cost of investment funding) and enjoy all free cash for remaining 19 year.

“The financing is only for 15 years. This includes about four years for construction. That means this project will be able to pay off the debt in about 11 years. After that, everything will be free cash flow,” explains Yeoh.

YTL Power will, in turn, look for ways to unlock value for shareholders using the predictable cash flow from Attarat — perhaps via debt refinancing or by monetising equity, he says.....

https://www.theedgemarkets.com/article/jordan-ipp-distant-bright-spot-...

Let calculate how profitability of YTLP in jordan based on 11 year profit generated from shale oil power plant to repay back all cost of investment USD 2.1 billion (excluding bank interest charge).

Jordan need to generate cash flow at least USD 200m per year to repay back ALL cost of investment funding USD 2.1 billion, it is whopping of the USD 200m profit or RM 820m per year. YTLP 45% stake translate into RM 370m per year or additional EPS = 4.6sen on top exiting annual business EPS 6sen. Therefore, YTLP forward EPS should record about 11sen, valuation now at historical low end 7x + dividend yield 6.3%.

ok

Dear DK66

Jaks Power plant cost USD 1.87 billion (RM 7.5 billion), funded by USD 1.402 billion and equity portion USD 0.468 billion or RM 1.87 billion. Jaks 30% equity stake RM 560m funded also through bank borrowing.

Therefore jaks total capital investment is RM 560m, you may said jaks 30% stake able to profit RM 280m-RM 380m a year for next 25 year. Thus, jaks return of investment is massive return 50% - 68%...... it only need jaks to take 2 year to get back all investment and enjoy next 23 year free profit.

The problem is how is it possible management guidance for internal rate return 12% become 50-68% for first 2 year investment and thereafter 100% ROI for next 23 year ?

https://www.thestar.com.my/business/business-news/2016/03/29/jaks-eyes-irr-of-12-for-rm7bil-vietnam-plant

DK66
Relationships Between the Internal Rate of Return (IRR), Cost of Capital, and Net Present Value (NPV). The IRR assume all project is funded by cash, but in reality, all IPP project are funded by bank borrowing including 25% equity portion. Therefore, the cost of capital need to take into account to arrive NET return.

https://maaw.info/IRRNPVandCostofCapital.htm

The profitability of power plant is DETERMINE by internal rate return on total cost of investment.

Even Jaks power plant is 1200MW vs YTLP Jordan power plant 470MW. The cost to build jaks is USD 1.87 billion vs cost to build YTLP USD 2.1 billion.

The internal rate return 12% for jaks is based on total cost of investment USD 1.87 billion. The internal rate 15% + 5% shale oil mining is based total cost of investment USD 2.1 billion.

The profitability is NOT based on power plant capacity 1200 MW vs 470MW, as all these power plant have 25 year concession and 30 year concession receptively.

The profitability of power plant is determine by internal rate return on total cost of investment.

Even Jaks power plant is 1200MW vs YTLP Jordan power plant 470MW. The cost to build jaks is USD 1.87 billion vs cost to build YTLP USD 2.1 billion.

The internal rate return 12% for jaks is based on total cost of investment USD 1.87 billion. The internal rate 15% + 5% shale oil mining is based total cost of investment USD 2.1 billion.

The profitability is NOT based on power plant capacity 1200 MW vs 470MW, as all these power plant have 25 year concession and 30 year concession receptively.

Another strong point toward how lucrative profitibility are the tenure of borrowing. In YTLp, the tenure borrowing only 15year including 4 year construction period. With 30 year concession period, it only need 11 year to fully repay ALL the cost of funding on both equity (25% cost of investment funding) and bank borrowing (75% cost of investment funding) and enjoy all free cash for remaining 19 year.

“The financing is only for 15 years. This includes about four years for construction. That means this project will be able to pay off the debt in about 11 years. After that, everything will be free cash flow,” explains Yeoh.

YTL Power will, in turn, look for ways to unlock value for shareholders using the predictable cash flow from Attarat — perhaps via debt refinancing or by monetising equity, he says.....

https://www.theedgemarkets.com/article/jordan-ipp-distant-bright-spot-ytl-power

Let calculate how profitability of YTLP in jordan based on 11 year profit generated from shale oil power plant to repay back all cost of investment USD 2.1 billion (excluding bank interest charge).

Jordan need to generate cash flow at least USD 200m per year to repay back ALL cost of investment funding USD 2.1 billion, it is whopping of the USD 200m profit or RM 820m per year. YTLP 45% stake translate into RM 370m per year or additional EPS = 4.6sen

In jaks case, the payback time for its equity portion (25% cost of investment) is about 8 year, but it have to continue repay borrowing bank ( 75% of cost of investment) till end of 25 year concession.

All is due to super lucrative ytlp high internal return + additional shale oil mining.

Please bear in mind, as almost all funding for investment is through bank borrowing including equity portion. Both YTLP and Jaks are through equity: debt financing 25%:75%, but the equity portion of YTLP and jaks also are funded through bank borrowing (different bank panel from project bank debt financing). Therefore, Interest cost of funding need to take into account in calculate the internal rate of return of each project.

Assume bank borrowing interest charge 5% + operation cost like staff cost and other miscellaneous cost form 2% expense. The higher internal return rate is vital to determine the profitability of the power plant.

YTLP higher power plant internal rate return of 15% + shale oil mining rate return 5% will give rise to NET INTERNAL RATE RETURN: 20% - bank interest charge - operation expense = 13%, whereas,

Jaks 12% internal rate return give rise to NET INTERNAL RATE RETURN 12% - bank interest charge - operation expense = NET internal rate return 5%


Based on cost of investment and internal rate return, the profitability of ytlp is alike having more than 2.5 x profitability compared to jaks power plant in Vietnam.

The profitability of power plant is determine by internal rate return on total cost of investment + exchange rate on cost

Where else can you find a 30-year concession project that is in US dollars?” YTL Power executive director Yeoh Seok Hong points out.

“When we first began negotiating for this power plant, the exchange rate (ringgit versus US dollars) was only 3.10. Today, it is around 4.45,” he says.

YTLP secure funding US$1.575 billion (RM4.88 billion) financing for the proposed construction of a power plant (IPP) in Jordan was based on exchange rate 1USD : RM 3.10

https://www.theedgemarkets.com/article/jordan-ipp-distant-bright-spot-...

vs.


Jaks secure funding US$1.402 billion (RM6.01 billion) financing for the proposed construction of a power plant (IPP) in Vietnam was based on exchange rate 1USD : RM 4.28

https://www.theedgemarkets.com/article/jaks-jv-secures-us14b-funding-p...


Therefore, YTLP have much higher upper hand in turn of profitability.

Jaks

1. Power plant cost USD 1.87 billion (exchange rate 1 USD : RM 4.288)
2. internal rate return 12%;
3. concession period 25year;
4. 30% stake (optional 40%)


YTLP (87% completion in Q4 2019)

1. Power plant cost USD 2.1 billion(exchange rate 1 USD : RM 3.10)
2. internal rate return 15%
3. concession period 30year
4. 45% stake
5. Plant come together with right to own oil shale mining operation that accompanies the plant. These is additional lucrative source of income.

Where else can you find a 30-year concession project that is in US dollars?” YTL Power executive director Yeoh Seok Hong points out.

“When we first began negotiating for this power plant, the exchange rate (ringgit versus US dollars) was only 3.10. Today, it is around 4.45,” he says.

YTLP secure funding US$1.575 billion (RM4.88 billion) financing for the proposed construction of a power plant (IPP) in Jordan was based on exchange rate 1USD : RM 3.10

https://www.theedgemarkets.com/article/jordan-ipp-distant-bright-spot-ytl-power

vs.


Jaks secure funding US$1.402 billion (RM6.01 billion) financing for the proposed construction of a power plant (IPP) in Vietnam was based on exchange rate 1USD : RM 4.28

https://www.theedgemarkets.com/article/jaks-jv-secures-us14b-funding-power-plant


Therefore, YTLP have much higher upper hand in turn of profitability.

Jaks

1. Power plant cost USD 1.87 billion (exchange rate 1 USD : RM 4.288)
2. internal rate return 12%;
3. concession period 25year;
4. 30% stake (optional 40%)


YTLP (87% completion in Q4 2019)

1. Power plant cost USD 2.1 billion(exchange rate 1 USD : RM 3.10)
2. internal rate return 15%
3. concession period 30year
4. 45% stake
5. Plant come together with right to own oil shale mining operation that accompanies the plant. These is additional lucrative source of income.

The profitability of power plant is determine by internal rate return on total cost of investment.

In Jordan shale oil power plant, the total cost is USD 2.1 billion (RM 8.6 billion), the internal rate return is 15% + the plant come together with right to own oil shale mining operation that accompanies the plant. These is additional lucrative source of income + 30 year concession period.

Unlike loss making Power seraya, despite carry big enterprice value RM 4 billion, but it come with nil concession and all open for competition which drag internal rate return into negative.

Most of the latest Malaysia IPP only carry internal rate return in single digit, about 8%, such as Malakroff. Jaks new power plant in Vietnam have 12% internal rate return. Upcoming YTLp another new power plant in Indonesia also carry 12% IRR.

https://www.nst.com.my/business/2019/12/549186/ytl-power-sukuk-option-fund-cirebon-job

Jaks (82% completion in Q3 2019)

1. Power plant cost USD 1.87 billion;
2. internal rate return 12%;
3. concession period 25year;
4. 30% stake (optional 40%)


YTLP (87% completion in Q4 2019)

1. Power plant cost USD 2.1 billion
2. internal rate return 15%
3. concession period 30year
4. 45% stake
5. Plant come together with right to own oil shale mining operation that accompanies the plant. These is additional lucrative source of income.

https://www.facebook.com/RoyaNews/videos/824182871352347/

Jaks (82% completion in Q3 2019)

1. Power plant cost USD 1.87 billion;
2. internal rate return 12%;
3. concession period 25year;
4. 30% stake (optional 40%)


YTLP (87% completion in Q4 2019)

1. Power plant cost USD 2.1 billion
2. internal rate return 15%
3. concession period 30year
4. 45% stake
5. Plant come together with right to own oil shale mining operation that accompanies the plant. These is additional lucrative source of income.

https://www.facebook.com/RoyaNews/videos/824182871352347/

There are 3 stock with New power plant ready in 2020

1. MFCB (completed Jan 2020)
2. Jaks (82% completion in Q3 2019), internal rate return 12%
3. YTLP (87% completion in Q4 2019), internal rate return 15% + at least 5% additional profit from mining on own shale oil field. The mining shale oil have already started operation, stockpile now to be ready to be use for first unit power plant commercial operation in Mar 2020.

https://www.facebook.com/RoyaNews/videos/824182871352347/UzpfSTM3NTg5MDEzOTU0MDkxNzo3OTg0MDk2MjM5NTU2MzE/

sold back jaks at 1.40, jaks-wb at 1.18-1.19

With New power profit ready to start recognized very soon with first unit start generate electricity in next month time and second unit in next 3 month time, YTLP earning will leap up very significantly as the jordan power command super high internal rate 15% + additional at least 5% from own shale oil mining vs. Jaks internal rate 12%

YTLP will next to follow MFCB and Jaks. YTLKP new power plant may generate electricity sooner than jaks based on jaks (82% completion) vs YTLp (87% completion).

YTLP power plant in jordan also divided into 2 separate unit. It first unit will generate electircyt first follow few month later by second unit. As show in video, the shale mining have started operation, stockpile shale oil ahead of fire power.

https://www.facebook.com/RoyaNews/videos/824182871352347/UzpfSTM3NTg5MDEzOTU0MDkxNzo3OTg0MDk2MjM5NTU2MzE/

YTLP power plant at jordan is using shale oil fire and the power plant itself have own shale oil for mining. Therefore, the power utilize own mining shale as feed stock to generate electricity. Thus, YTLP jordan plant command much higher internal rate of 15% + 5% mining profit margin.

While jaks power plant have reach completion 82%, YTLp power plant have reach 87%

https://www.facebook.com/RoyaNews/videos/824182871352347/UzpfSTM3NTg5MDEzOTU0MDkxNzo3OTg0MDk2MjM5NTU2MzE/

Average Q3 2019, July RM 1879; Aug RM 2067; Sept RM 2097. Based on Jtiasa corporate presentation, it record about RM 1935 in Q3 2019, enjoy profit margin 30%, recorded EPS 1.63sen (jtiasa should record much higher EPS if without offset by loss in timber business)



Average Q4 2019 should be about RM 2500 based on average selling price Oct RM 2104; Nov RM 2494; Dec 2813.

As the cost of production is relatively fixed, therefore, any surplus above cost is direct translate into increment in profit margin and net profit.


Average Q1 2020, will be around RM 2900-3000.

The fact that Gov to tag WINDFALL TAX of CPO > RM 3000 is due to too massive profit margin enjoy by planter.

Therefore, if CPO can trade in a region RM 2800-3000, planter can avoid incur windfall tax on >RM 3000 which only benefited Gov coffer.

The main reason for CPO to move up significantly are mainly due to Malaysia Gov policy and Indonesia policy change in which Malaysia to implement biodiesel from blending 7% to 20%, a massively 200% increment in use of palm oil blending.

On the other hand, Indonesia gov will mandatory implement biodiesel 20% in 2020 and to further increase to biodissel 30% in 2022

Please bear in mind, the CPO price have gone more than 50% in 3 month period from < RM 2000 was <RM 2000 in Q3 2019 to > RM 3000 in Q1 2020.

bought back paramount at 1.34-1.35

CPO price gain back, higher today

sold back all at 1.40

With PM step down soon, Indian boycott refine palm oil will soon lifted or Indian will further increase CPO purchase instead of import refine palm oil.

These higher import CPO to refine locally in Indian is to protect their refinery industry. Malaysia CPO is price lower if compared to Indonesia CPO due to lower freight cost, shorter distance.

Indian government and industry sources have told Reuters that Prime Minister Narendra Modi's Hindu nationalist government was seeking to target Malaysia, after recent criticism of India by Malaysian Prime Minister Mahathir Mohamad


PM: I’m ready to step down
https://www.thestar.com.my/news/nation/2020/01/15/pm-im-ready-to-step-down

https://www.theedgemarkets.com/article/impact-indias-refined-cpo-import-policy-may-not-be-significant

bought more rsawit at 34sen

add more at 40-41.5sen

bought Jaks at 1.25

sold back Uzma at RM 1.02

sold back hibiscus at 99.5sen

Jaya Tiasa in 2015 purchase 140 million RSawit shares, or a 9.87% stake for RM70mil cash

add more RS at 43sen

bought back RS at 42.5sen

sold back Bpuri at 9.5sen

sold back RS at 44sen

Kyy comment......Jaks is basically a construction contractor and a property developer. A few years ago, the CEO Andy Ang in joint venture with Jaks to undertake the development of Star Media’s 6 acres of the land in Petaling Jaya, KL. which has planning permission for 2 office tower blocks in front and 3 high rise condominium blocks at the back. All these 5 blocks of high rise buildings are sitting on a 4 storey under round car park.

Since the JV did not pay for the land, it has agreed to give one of the 2 office blocks and Rm 50 million performance bank guarantee to Star Media. Up to date, Andy Ang and Jaks JV could not complete the development project and the High Court has passed judgement for in favour of Star to forfeit the Rm 50 million performance guarantee. Moreover, Star and many other buyers are suing Jaks for the completion delay.

Under the circumstances, I suspect Andy Ang has sold his share in the JV to Jaks which he did not require to call an EGM to seek shareholders’ approval. I also suspect, a large portion of this huge development are not sold.


My 2 sen reply.....Jaks 51%.the pacific star, already paid performance bond RM 50m or effective RM 25.5m for Jaks 51%. These is min reason for Jaks reported loss in previous quarter result. Due to lack of financial strength after paid up these 25.5m to the star, Jaks have subsequent call up right for warrant 1 for 2 at 25sen. Since these incident, Jaks share price have retrieved, down to below RM 1.20....kyy have started facing margin call from the banker, need to sold down his stake to meet margin call, as since kyy is major shareholder, trim down stake have to report to bursa and announcement appear to retail follower. These have create viscous cycle, many follow kyy to cut down stake, share price keep coming down, till broke below RM 1.00 psychological level. Jaks share price did rebound back for a while to above RM 1.00, but failed to sustain long, Jaks share price again down to below 90sen. These have cause many loss confident including kyy, prompt him to cut down entire balance stake in Jaks, force selling Jaks share price to below 70sen. In the end, kyy sold off KL Jaks stake and incur RM 70m loss. These also resulted Jaks fail to meet its targeted fund rising from 25sen new warrant issue, undersubscribe about 40%. The undersubscribe warrant announcement have further weight down on Jaks share price sentiment to below 50sen.

The delay in handover the pacific star to purchaser is also main culprit Jaks report reducing profit as Jaks need to make provision on late ascertain damage (LAD) to the purchaser. With LAD provided, purchaser get their compensation in accord to the delay time. The LAD provision amounted to average -RM9m every quarter have erode profit recognition from construction power plant, resulted Jaks reported lower EPS.

But, all these have ended in month Dec 2019. Jaks have through bursa announcement reported block in pacific star have fully completed, now pending insurance CCC. Therefore, from 2020 onward, Jaks needless to make any further LAD to the purchaser.

As the pacific star is JV between 51% own by Jaks and 49% own by CEO Andy, the development cost are consolidate in Jaks financial books. The inter-company borrowing between Jaks and CEO Andy is now settle through Andy 49% entitlement in Pacific star unit in office tower and car park. In short, Jaks get back its borrowing in JV company via transfer Andy ownership in pacific star to Jaks. Therefore, Jaks will get full ownership in entire pacific star mall car park and additional office tower unit.

RemRk: the entire pacific star consist of 2 office block, one assign for the star as landowner, another office block is retain for investment. The 3 residence block have more than 90% sold. The mall and car park are retain for investment purpose.

Kyy comment......Investors should look at how the Indian Government distribution system in the delaying the actual completion Mudajaya’s coal power plant in India.

My 2 sen reply.....Indian is largest democratic in the world. Indian general election need to take 3 month for completion and courting poll for few week. Indian have clear divided power between central govern power and local govern power, gap divided citizen and state wealth. The BOT signed by Indian central govern and concession can be no honor by local or central government themselves, the system democracy in Indian is main culprit for inefficiency and lack of compliance on continually in policy.

Mudajaya failure in Indian cannot use as excuse to replicate in Jaks operate in Vietnam. Bear in mind, Vietnam’s is communist rule, one party system, therefore have policy continually. The success in Vietnam’s is further supported by other power plant player which already operate for 3 year with similar BOT alike Jaks, profit recorded now is just too good to be true.

Kyy comment.....As you know, the power plant construction is not completed yet and it has not reported any profit from selling electricity. Unfortunately, Mr Ooi Teik Bee has already circulated his projected profit recommendation to all his subscribers and followers. You should not buy Jaks now. You should only start to buy when it can show increasing profit for 2 consecutive quarters from its power generation in Vietnam.

Even when the 2 X 600 MW coal power plant is completed, all the other ancillary construction works might not be completed to use up all the 1,200 MW electricity. All of a sudden, the Vietnamese distribution system might not be able to cope with the 1,200 MW of electricity supply.


My 2sen reply.....power plant have reach various milestone and have achieved overall completion rate at 82% up to end sept 2019. The milestone at each stage is very important to verify the plant meet stringent compliance, ensure plant integrity when start commercial operation, therefore reduce future operation risk. The first unit of 600MW should now reach final completion and at various testing stage preparing for trial generation electricity to the grid soon. Therefore, the connection from the power plant to the distribution system already in place in these trial period before commercial operation by April 2020. Bear in mind, Vietnam government is demanding power from new plant to be as fast as possible to guarantee power supply to meet huge foreign direct investment.

Mr OTB is right minded to invest in Jaks at tail end of power plant construction period, about 6 month ahead before Jaks first unit 600 MW power profit recorded. Although kyy comment for 2 consecutive increasing profit before buy in is right too, but it may only workable for stock with already have exiting business and turnaround. It may not work for Jaks as the power plant profit is NEW source of profit and these profit figure is strongly backed by similar power plant operate in Vietnam’s as show by DK66 with black and white figure extracted from their financial report.

Agreed, the timing is important if wanna to capitalize on power plant profit. The 4 year construction period have its risk, kyy opt to invest massively until become largest Jaks shareholder on second to 3 rd construction period, but failed to hold on his confident on Jaks, opt to cut loss and sold down his stake from 27% to nil, his action also trigger Jaks share price tumble and marked down further by loss confident by his follower.......Masterminded sifu like DK66 is wise and have fate on Jaks, long term holding throughout entire 4 year construction period; masterminded sifu like OTB even wiser, opt best margin of safety to invest Jaks at its tail end of construction, reduce construction risk, to shorter harvest time on upcoming power plant profit.

With power plant at stage 82% completion up to end sept, the progress for first unit 600MW total completion is expect to achieve in early 2020, and will fire up first to generate electricity by April. The final stage of completion for second unit should be achieved earlier than expected 6 month later to fire up another 600MW. Therefore, maiden first unit 600MW power recognition can be recorded as soon as Q2 2020.

Jaks 51% own evolve mall should achieved operation break even as the occupancy rate have increase to 85%. The pacific star project also already fully completed in Dec 2019, now pending insurance CCC. Therefore, Jaks local business at least will not become dragging factor to Jaks future earning starting 2020.

last year If remember correctly, kyy start sold his stake at level below RM 1.20, but later decided to continue sold down Jaks up to level below 70sen, the average selling price about 90sen/ share and incur total loss RM 70m.

Let’s assume kyy stay invested in Jaks until now and also subscribe his entitlement jaks warrant 1 for 2 at 25sen, kyy should now very comfortable on paper gain based on Jaks RM 1.27 + Jaks-wb at RM 1.05, a massive gain of 300%. Therefore, kyy wealth not only able to retain RM 70m, but also gain multimillion on Jaks-Wb. Nonetheless, Kyy opt to sold off Jaks and incur massive loss RM 70m, but lucky, able to recoup back mostly through dayang.

bought Rsawit at 43sen