Posted by JayC > 2014-03-03 16:21 | Report Abuse

Mr. Koon, I believe in you. Since you are the founder, and know this counter inside out. This counter is gonna shine in 2014

Posted by johnny cash > 2014-03-03 17:30 | Report Abuse

with your blessing Mr Koon, sure will rocket up this year

Posted by johnny cash > 2014-03-03 17:50 | Report Abuse

Wong said the first unit would be commissioned by the third quarter of this year, and the other three units to be commissioned in stages soon after.- Star biz

The first unit of 360 mw will be operational by end of March and the second unit will be operational by end of the 2nd quarter. By the end of the year all the 4 units will be in full operation.-- taken from MUDAJAYA--WILD CARD

2 different statements,, so which is correct?? thanks

Posted by Koon Yew Yin > 2014-03-03 18:07 | Report Abuse

Johnny, I am sorry to admit my mistake. What is reported in the Star biz should be correct.

Posted by johnny cash > 2014-03-03 19:02 | Report Abuse

Mr Koon thank you very much in clearing it

Posted by kk123 > 2014-03-03 20:59 | Report Abuse

The "article" doesn't seem to help mudajaya share price
I guess the investment fraternity no longer trust this company due to its many regulatory problems

Posted by JayC > 2014-03-03 22:28 | Report Abuse

This counter also cannot go down more than 2.60. Means, limited downside with maximum upside! Warren buffet theory of investment!

Posted by johnny cash > 2014-03-04 13:57 | Report Abuse

MARKET is actually waiting for the firing of the powerplants in india..now their main probelm, is the indian powerplant issues, alway delays.. hope this time does not happen.. firing of the first powerplant, on 3rd quarter, wow so long to wait

Posted by kkng0819kk > 2014-03-04 17:35 | Report Abuse

Pl study the company 's financial statements for the past 40 years,the com had not incurred any losses even during several financial crisis that struck us!so stay with the old faithful for many years to come!

Posted by Alphabeta > 2014-03-04 22:06 | Report Abuse

Uncle Koon, i did some research on construction costs of Coal fire power plant in India, the cost of construction per kw (1 mw = 1,000 kw) is around USD 1,500 to USD 1,800. The RM5billion for a 1440 mw worked out to be around USD 1,085 per kw USD([RM5b/3.2)/1440*1000].

Is the RM 5b the original estimate or the revised estimate taking into consideration of the delay?

Posted by alphabeta > 2014-03-05 10:52 | Report Abuse

I did a rough check on its 31/12/12 Balance Sheet on its investment in cost in its India JV with Powergen, the total cost of unquoted shares in India as at that date is RM 861 mil. If Mudajaya shareholding interest in the JV is 26%, then the total equity in the India JV will be RM 3.31b.

Base on my knowledge on infrastructure financing arrangement in India, assuming a debt equity structure of 30:70, the total project cost will be around RM 11.05b (RM3.31*100/30).

The project cost could have doubled from the original estimate of RM5b. Just a logical deduction. Correct me if i am wrong.

Another puzzle is, it the company is doing well. Why the former MD of Mudajaya Ng Ying Loong started selling some of his holding consecutively over three days when there is a uptrend on the price.

Posted by alphabeta > 2014-03-05 11:30 | Report Abuse

When there is a cost overrun, Bankers will not come in to fund the deficit unless you can convince them that the project still viable. Else shareholders will have to foot the escalated costs in the form of equity or zero interest advances.

Hence, the final project cost could be lower than the RM 11 b. If we work and based on the above premise, if the RM5b is the original costs, 30% equity shall be RM 1.5b, 26% equity interest mean Mudajaya foot in RM 390mil. Now the extra equity is $M 4.72 mil, if the Indian partner was to put in the 74%, the total escalation will be RM 1.82 b (RM 4.72+ 4.72*74/26.

A total of 36% more than the original estimate, hence close to USD 1,500 per kw (RM 5 b + RM 1.82b)/1440x1000.

Posted by Koon Yew Yin > 2014-03-05 11:44 | Report Abuse

alphabeta, As I said I am a businessman, I do know how to calculate all those figures which worry you as a professional accountant or fund manager. All I know is that the consortium of banks must make sure that the whole business of selling electricity to the Indian Government for 25 years must be profitable to Mudajaya and his partners. Otherwise every body including the banks will go bankrupt and all the Indian people will suffer without electricity. I will also lose my pants by owning so much of Mudajaya and all the poor students who expects to receive my scholarships will also suffer.

I did not bother to ask why Ng Ying Loong sold some Mudajaya shares because the amount he sold is so small. He owns 24.49% of the total issued shares of 543.2 million. He probably needs money to buy a new Mercedes or a holiday home in Switzerland.

Posted by alphabeta > 2014-03-05 12:00 | Report Abuse

Thank you Uncle Koon for your respond, managing and controlling capex is part of the investment decision which has future implication on ROE. Fortunately, Mudajaya has only 26% equity interest.

Despite all the above negative remarks on Mudajaya Power Plant, my assessment on MJC financial position is still solid like a rock but it will take a while for its net profit and ROE to surpass its past performance.

It is a good counter and will keep an eye to add this to my portfolio.

Posted by alphabeta > 2014-03-05 12:11 | Report Abuse

Just pulling your legs, Uncle Koon. No heart feeling..

Posted by alphabeta > 2014-03-05 19:55 | Report Abuse

India has experience strong economic expansion from 2004 till 2009, due to the high interest rate charged by the local financial institution. A lot of corporate borrow foreign currency loans at much lower rate but suffered when the Rupee depreciate against USD and other currencies.

Most of these loans are due for repayment and banks in India are facing increasing non performing loans.

I won't be surprise if upon completion of the power plant, the consortium banks may reset the interest at higher rate if the power plant venture rating deteriorated.

The point i am trying to make here is, sometime company do make mistake in their investment decision and as a result their return suffered and affected the overall return on equity. The good thing about power plant compared to toll highway is it capacity off take is fast compared to toll highway where the traffic number needed to built up over time.

Mudajaya so far has used its internal funds for investment till recently. Its financial status has drop but still consider strong. Will see what is the final project costs of the power plant.

Posted by Alphabeta > 2014-03-07 21:13 | Report Abuse

I have read the latest news from one of the leading business papers from India "The Economic Times" concerning power producers in Chhattisgarh.

I thought this piece of news is relevant for those who wish to know the status of RKM Power Gen-Mudajaya Coal fired plant in India.

Inadequate transmission network troubles power producers in Chhattisgarh

By Mitul Thakkar, ET Bureau | 3 Jan, 2014, 04.12PM IS

NEW DELHI: Power project developers in Chhattisgarh fear lower profits because of a lack of adequate transmission network that limits their ability to sell surplus electricity out of the state.

Besides state utilities, private power producers such as KSK Energy, Jindal Steel & Power, RKM Powergen and Bhaskar Group are commissioning new projects in Chhattisgarh which will more than double the state's electricity generation capacity in the next couple of years from close to 9,500 mw now. Transmission network in the state, however, is not expanding at the same pace.

"We will soon face a situation where evacuating electricity out of the state will be a challenge as the state commissions more generation capacities," said Shivraj Singh, chairman of state-owned Chhattisgarh State Power Holding Company. "Today, state utilities are selling 400 mw of power to other states and this will ramp up to 900 mw soon. There will be challenges as private producers too add generation capacities."

According to him, Power Grid Corporation was to provide grid connectivity to power projects based in the state. "I am not sure about the status of transmission network projects initiated by Power Grid Corporation. Power producers will not be able to attract good tariff in the absence of adequate evacuation capacities," he said.

By March 2014, Chhattisgarh will add 3,200 mw, which will increase the state's total generation capacity to more than 12,500 mw, but the capacity of transmission networks in the state by then will be just about 9,000 mw. It is projected to have 21,500 mw of generation capacity by March 2015. The lack of adequate transmission network is already hurting the state's ability to sell power on the spot market to outside consumers. According to power-trading platform Indian Energy Exchange, Chhattisgar witnessed power price going down to Rs 2.30 a unit in November from Rs 2.41 in October.

Commenting on the progress of transmission network, a top Power Grid Corporation official, requesting anonymity, said the company will be able to commission projects if it gets timely environmental clearances and land-usage permission. "We are not responsible for factors beyond our control."

The official said the company's projects in the state are "more or less" progressing as per schedule.

Jindal Steel & Power, which operates the country's first mega power project in the private sector near Raigarh in Chhattisgarh, is already facing limitations in selling power to other states. It is in the process of ramping up its generation capacity from 1,000 mw to 3,400 mw.

"There are new power-transmission lines under construction, which shall provide additional capacity of around 8,500 mw progressively by June 2015. It means Chhattisgarh will have transmission capacity of 16,500-17,500 mw against installed capacity of 21,500 mw in next two years," said a top executive at one of the private sector power producers in the state.

Posted by Alphabeta > 2014-03-07 21:21 | Report Abuse

There was a rating done by INCRA on Oct 2012 and has reaffirmed the [ICRA]BB- (pronounced ICRA double B minus) rating assigned to the long term fund based facilities of Rs. 1024.11 crores and the long term non-fund based facilities of Rs. 255 crores of RKM Powergen Private Limited (RKMPPL). The outlook on the long term rating is Stable.

ICRA’s rating is constrained by project execution risks, including risks of cost and time overrun, which are inherent to large sized green-field power projects. This is also reflected in delays in the implementation of both phases of 1430 MW domestic coal based thermal power plant being set up by RKMPPL at Uchpinda, Chhattisgarh largely because of land compensation-related issues which however have been resolved now. ICRA also takes note of the funding risks arising out of increase in the project cost for phase-1 from Rs.1487.5 crores (Rs. 4.25 crores/MW) to Rs.2066.86 crores (Rs.5.90 crores/MW) and as cost escalation is also expected in Phase-2 owing to time delay, open forex positions and increase in customs duty.

Further, the rating factors in the relatively early stage of implementation of the ancillary infrastructure and lack of experience of the promoter group in executing projects of this scale, which is partly mitigated by the presence of experienced team. Moreover, the project is also exposed to technology risks given the limited track record of the vendors with respect to boiler, turbine, generator (BTG) and balance of plant (BOP) in Indian conditions till date.

The rating factors in the fuel supply risks arising due to the early stage of development of the coal block and also as the coal linkage is limited by the growing coal demand-supply imbalance in the country. RKMPPL has tied up approx 37.5% of the net capacity through a cost-plus PPA with the Chhattisgarh State Electricity Board (CSEB) and arrangements are in place for the sale of approx 700 MW through a long term PPA with PTC India Limited (PTC). ICRA notes that PTC has not yet entered into firm back-to-back long term sale arrangements for the contracted 700 MW which increases the off-take risks.

The rating however draws comfort from the receipt of permits required for both phases of the project and debt tie-up for the cost overruns in phase-1 (1*350 MW) which also includes deferment of COD to October, 2013 from May, 2012 and deferment of debt repayment.

ICRA also takes note of the substantial infusion of equity funds by the promoters, with infusion of Rs. 1435.71 crores out of the total requirement of Rs. 1734.34 crores, which includes the equity portion of the cost overrun for phase-1; however the equity requirement is expected to increase owing to the expected cost overrun for phase-2 of the project.

Company Profile RKM Powergen Private Limited is an SPV promoted by the Chennai based R.K. Powergen Group (74% holding) and the Malaysia based Mudajaya Group (26% holding) for the development of a 1430 domestic coal based thermal power project at Chhattisgarh in 2 phases (Phase 1 of 350 MW (1 x 350) and Phase 2 of 1080 MW (3 x 360)). The equity to be infused by Mudajaya Group would be at a substantial premium such that the proportion of actual equity to be contributed towards the project cost would be in the ratio of 26:74 with the latter denoting Mudajaya Group’s contribution. R.K. Powergen Group operates a 20 MW biomass based power plant in Karnataka while the Mudajaya Group is largely engaged in EPC works for various sectors including roads, water, power (civil works) etc. The total project cost of Rs. 7233 crore (increased from Rs. 6653 crores due to cost overruns in phase-1; the cost overrun for phase-2 is yet to be ascertained) is being funded through debt of Rs. 5499 crores and equity of Rs. 1734 crores.

Posted by Icon8888 > 2014-03-07 21:29 | Report Abuse

Alphabeta u very thorough....

Posted by Icon8888 > 2014-03-07 21:29 | Report Abuse

I usually buy first think later wakakakaka

Posted by Alphabeta > 2014-03-07 21:51 | Report Abuse

Just for your information, i found out that 1 crore equal to 10 million rupee. Hope the above information will be useful. I will try to find out more to assess the impact on return on investment of this power plant. Hopefully it is still positive and my concern is the near term implication of its cash flow after operating costs, interest payment and debt repayment should the off take is not that strong in the early years.

This will require shareholders to pump in more money to sustain operation. Right now Mudajaya last quarter result already showed some borrowings in its balance sheet.

Posted by Icon8888 > 2014-03-07 21:53 | Report Abuse

Let me see what else u invest in ... You are such a careful fellow...

Posted by Icon8888 > 2014-03-07 21:57 | Report Abuse

Ah you have some sunreit

I recently bought some too. Went to pyramid just to have a feel. Nice. Like it

Posted by Koon Yew Yin > 2014-03-07 23:38 | Report Abuse

The whole business of producing electricity as an Independent Power Producer (IPP) to sell to the State Government involves several parties. Let me try to explain. The first party is the buyer of electricity and in this case is the state-owned Chhattisgarh State Power Holding Company. They buy the electricity from the IPP at an agreed tariff based on the coal and other cost with guaranteed profit for 25 years. The electricity supply is measurement at the power station and IPP must be paid on the basis of "take it or leave it". The consortium of banks are prepared to finance the whole project based on the power purchase agreement duly signed by State Power Holding Company and the Banks must make sure that the whole business must by profitable for the IPP other wise the Banks would not recover their money.

The State Power company sells the electricity to all the local consumers and in this case they also sell their surplus electricity to other states.

The electricity is transported through transmission line which is own by another company called the Power Grid Corporation which provides grid connectivity to power projects based in the state. In this case there are many IPP using the transmission network. Obviously the final tariff to the consumers would include the cost from both the State Power Holding company and the Power Grid Corporation.

The article as pointed out by Alphabeta regarding shortage of power transmission line to carry electricity to other states does not really affect the Mudajaya and its partner as IPP. IPP cannot be involved in the transmission line business because of the difficulty of protecting thousand kilo meters of the power line and the theft of electricity.

As an example, YTL does not own the power transmission line in Malaysia and YTL does not care if there is not enough of transmission line to carry electricity to Penang or to Johore.

I hope you have a better idea of Mudajaya's IPP business.

Posted by Alphabeta > 2014-03-08 10:39 | Report Abuse

Thanks Mr Koon for the enlightenment, so the power off take is lock in and if the state cannot resolve the mis-matched of power generation and transmission capacities issue. The power tariff rate of the new proposed power plant will be lower as the state not able to sell the excess power supply to other states. Noted...

So what left will be the interest rate risk due to the low ICRA BB- rating and commissioning of the plant which will delay and resulted in delay and cost escalation.

One of the comment put up in the ICRA rating report:
"Moreover, the project is also exposed to technology risks given the limited track record of the vendors with respect to boiler, turbine, generator (BTG) and balance of plant (BOP) in Indian conditions till date."

The equipment suppliers from China may be facing technical hiccup to balance the various equipment to meet the India Conditions.

Since Shareholders are footing the extra cost with equity, i think the lenders will not compliant much as the risk of default is moderate.

The project most likely will be able to meet the Debt Service Coverage Ratio [Annual EBITDA/(debt repayment + Interests)]. The only impact will be the return on investment due to cost overrun.

One thing for sure, the delay in commissioning will surely reduce the power plant total earning over the concession period as it includes construction time.

Posted by Alphabeta > 2014-03-08 14:21 | Report Abuse

Mr Koon, as per the article published above. It stated that "The power plant is expected to make profit contribution to Mudajaya to the tune of some RM70mil per year upon the full commissioning of the power plant."

If that is the case, a one year delay in commissioning the plant will translate into a loss of profit amounting to RM 269 mil (RM 70*100/26). The annual write off of the power plant development costs will increase (a combination of cost escalation and reduce billing period due to delay.

A 1% increased in interest rate due to poor BB- rating on the estimated RM 1.5 b loans will translate into RM 15 mil extra interest charged after completion of construction period. Reserve Bank of India just announced an increase of OPR by 0.25% to 8%. Company with good rating will normally get long term loan at 10% in India. Power Gen power plant may have to pay around 12% p.a., just a guess.

Indian Rupee has weakened 15% against USD, if we assumed the same rate against the ringgit. Mudajaya equity investment of RM 862 million to-date could have a forex translation loss of RM 129 million. The reported unrealized loss against the equity as at 31-12-12 was RM 225 mil (26%).

The loss of profits due to delay, higher annual capex charged due to cost escalation, higher interest cost due to poor rating and forex translation loss (if rupee were to weaken further) will a drag on Mudajaya return on investment. Hopefully the cost escalation is already at its tail end.

Posted by Alphabeta > 2014-03-08 22:18 | Report Abuse

Icon8888, one of my holding for quite a while is UCHITEC (avg price 1.15). Company strong in R&D with pioneer status approved recently. It manages its capex well and paid around 70% of its earning as dividend.

Strong customer focus, previously produce IC board for coffee makers and recently venture into IC for Biotech equipment.

At current price of 1.36, its dividend yield has dropped to slightly above 7%, previously double digit. ROE above 20%. Take a look if you are interested. Potential for growth once it increases its market shares in the biotech sphere.

Posted by Icon8888 > 2014-03-09 08:27 | Report Abuse

Ok thanks for tipping off. I am always open to ideas

Posted by johnny cash > 2014-04-02 18:49 | Report Abuse

Changes in Director's Interest (S135)



Wednesday, 2 Apr 2014

6:16PM WTHORSE Liao Yuan Shun (1,500,000 units Transferred)
6:16PM OCK Ooi Chin Khoon (339,500 units Disposed)
6:15PM WTHORSE Teo Kim Tay (1,071,200 units Transferred)
6:10PM WTHORSE Teo Kim Lap (1,511,200 units Transferred)
6:09PM BOILERM Wong Wee Voo (96,000 units Disposed)
6:03PM KIANJOO DATO' SEE TEOW GUAN (150,000 units Transacted)
5:51PM CHINWEL Lim Chien Ch'eng (6,250 units Acquired)
5:40PM MMODE Ahmad Shukri Bin Abdullah (20,000 units Acquired)
5:35PM PERISAI Dato' Dr. Mohamed Ariffin Bin Hj. Aton (10,000 units Disposed)
5:35PM IHH Tan Sri Dato' Dr. Abu Bakar Bin Suleiman (24,000 units Acquired)
5:34PM IHH Dr Tan See Leng (10,055,000 units Acquired)
5:30PM DATAPRP Muhammad Fauzi Bin Abd Ghani (100,000 units Acquired)
5:29PM OSKVI Dato' Nik Mohamed Din Bin Datuk Nik Yusoff (20,000 units Disposed)
5:25PM MUDAJYA Yong Yee Coi (100,000 units Disposed)
5:24PM POHUAT TAY KIM HUAT (50,000 units Acquired)
5:14PM KNM Gan Siew Liat (12,000,000 units Transacted)
5:14PM KNM Ir Lee Swee Eng (12,000,000 units Transacted)
5:14PM PRTASCO Dato¿ Mohd Hanif bin Sher Mohamed (19,000 units Disposed)
5:13PM YINSON LIM HAN WENG (12,200,000 units Transferred)
5:09PM VOIR Ham Hon Kit (400,000 units Transacted)
5:09PM VOIR Wong Seow Mooi (33,466,533 units Transacted)
5:09PM VOIR Dr. Mohd. Amir Sharifuddin B. Hashim (4,959,529 units Transacted)
5:09PM VOIR Seow Khim Soon (33,466,533 units Transacted)
5:08PM VOIR Lee Yuet Sum (66,666 units Transacted)

DIRECTOR KEEP ON SELLING ON MUDAJAYA

Posted by johnny cash > 2014-04-24 20:24 | Report Abuse

http://klse.i3investor.com/blogs/rhb/50808.jsp

at last the TRUTH is out no wonder ex director was selling..want to buy CAR ha......

mind games ha

Posted by johnny cash > 2014-05-27 18:40 |

Post removed.Why?