Posted by Icon8888 > 2018-12-06 17:06 | Report Abuse

I just couldn't be bother

Posted by Choivo Capital > 2018-12-06 17:11 | Report Abuse

CharlesT,

I felt that the IPP going holland was probably 65% chance. Because i don't have all the data and accesss to the actual contract and cashflow models.

No, whether or not i'll take the bet, depends on the odds.

1:5 payout, can consider.

But this price, no idea man. So many other things to buy. 20 sen can gua. Buy 1-1.5% lol.

Posted by Choivo Capital > 2018-12-06 17:14 | Report Abuse

Sure. However, i dont think you know anything about the actual profitability of the plant beyond and "I guess can gua".

That's the key info, it would be odd for you to have written 6 articles with close to zero real data on this, if you actually enough data to support it.

nor would the position be a mere 4% lol.

====
Posted by Icon8888 > Dec 6, 2018 05:06 PM | Report Abuse

I just couldn't be bother

Posted by Icon8888 > 2018-12-06 17:46 | Report Abuse

Ok ok you are right. Jaks is going to lose 400 mil every year over next 25 years

Posted by qqq3 > 2018-12-06 17:46 | Report Abuse

Hengyuan lost money...want to extrapolate here extrapolate there, no one should built oil refineries any more.....world no need refined oil.....

somebody lost money on power plant.....no one need to build power plant anymore.

stock market talk.....very weird one...stock market some times attracts all the wrong people.

Posted by valuelurker > 2018-12-06 17:47 | Report Abuse

Auditors really are second grade students

Posted by Icon8888 > 2018-12-06 17:48 | Report Abuse

the internet is really full of weird people

if you take them too seriously you will go crazy

Posted by lcwin > 2018-12-06 17:48 | Report Abuse

Choivo have you take into consideration the fact that the controlling Shareholder is not even holding more than 33% of JAKS.
If I am the boss and I know first hand I can double my money in 2 years if I invest in this foolproof scheme.What should I do?
1) Let other share the jackpot like santa claus
2) Grab everything myself
3) do noting and be content with status quo

Posted by qqq3 > 2018-12-06 18:03 | Report Abuse

Kyy dreams of being Francis Yeoh but the market crashed before that......that is extrapolate wrongly on the bullish side.

There are others who also extrapolate wrongly on the bearish side.

make money lose money, life not just about money.

I would say every successful businessman also got plenty of critics before he become successful.

Posted by Choivo Capital > 2018-12-06 19:06 | Report Abuse

lcwin,

I'm assuming that this management is not great, given their track record.

Posted by CharlesT > 2018-12-06 19:13 | Report Abuse

I doubt if kyy wanna be francis yeoh no 2..i believe he just wanna make a fast killing using ipp 2020 dreams..seriously u think he can wait so long to enjoy the recurring profit for 25 years meh or do u think he wanna let his grandchildren to enjoy meh..like in xinquan case..

Unfortunately the plan fail as he couldnt attract much..

Bsides he also kena played backside 99 by ALP

So instead of goreng stock he kena goreng...sad...

Posted by CharlesT > 2018-12-06 19:15 | Report Abuse

Now even without pineapple he also can do biz easily in toilet

Posted by qqq3 > 2018-12-06 19:17 | Report Abuse

Choivo Capital > Dec 6, 2018 07:06 PM | Report Abuse

lcwin,

I'm assuming that this management is not great, given their track record.
=============

chicken or egg? u should be ashamed of your extrapolate here extrapolate there....but u seem very proud of your extrapolate here extrapolate there ......

u too keen to show off your extrapolation skills.

in reality people are flexible, numbers are dead.

perceptions changes....bull market and bear market people change.

bull time...someone will find some extrapolation to justify $ 5 a share.

Posted by lcwin > 2018-12-06 19:22 | Report Abuse

Choivo Well you better make a more rational assumption if you are into Jaks. Any half baked boss will corner the shares way before the deal is done. Its human nature to be greedy...look at ahcheat and Jlow.
So here Jaks have a presumably super power station deal and he the Boss is just holding less than 30% of the company .
Malaysia Santa Claus ?

Posted by Sslee > 2018-12-06 20:04 | Report Abuse

Dear Choivo Capital,
Depreciation is cash flow positive. If you use 10 years to depreciate the capital cost that mean you have 10% of total capital cost as cash every year.

Thank you

Posted by Choivo Capital > 2018-12-06 20:41 | Report Abuse

Not buying.

===
lcwin Choivo Well you better make a more rational assumption if you are into Jaks. Any half baked boss will corner the shares way before the deal is done. Its human nature to be greedy...look at ahcheat and Jlow.
So here Jaks have a presumably super power station deal and he the Boss is just holding less than 30% of the company .
Malaysia Santa Claus ?
06/12/2018 19:22

Posted by Choivo Capital > 2018-12-06 20:45 | Report Abuse

Dear sslee,

The figures above, given by KYY and (probably by extension the management), is BEFORE depreciation and Interest Expense. They quote 200m-300m.

By my calculation, interest expense if more than RM300m

Optimally, id like a margin of safety. Which means cashflow of RM400m at least.

Having said that, i never really liked any management that focuses on EBITDA as if depreciation and amortisation is not an expense

Dep and Amor, is the worst kind of expense there is. Most expenses, you pay as you use. For these two, you pay for ALL your future use upfront! You miss out on opportunity cost, as well as the natural inflation, which makes your future expenses cheaper than they are today.

In scenarios like this, the only thing we should pay is below book value, and far below.

Thats just my view anyway.

====
Sslee Dear Choivo Capital,
Depreciation is cash flow positive. If you use 10 years to depreciate the capital cost that mean you have 10% of total capital cost as cash every year.

Thank you
06/12/2018 20:04

Posted by qqq3 > 2018-12-06 20:48 | Report Abuse

woah the engineer want to correct the accountant....fierce....

sslee...sure or not, u understand stuffs outside your machines?

Posted by Choivo Capital > 2018-12-06 20:52 | Report Abuse

Sslee is correct.

However, the image given by accounting often do not properly describe the reality of the economics of the business.

Example, coca cola recognizes almost zero intangible assets. but they have arguably on of the best intangible asset out there.

And its futile to try and match them. The goals are different.

For example, in the one above, we cant exactly let companies just recognize any intangible asset that they please.

In investing, one needs to both know the figures in terms of accounting standards, as well as their economic reality.

Another example, PBA and TM, have very undervalued PPE. They have fully depreciated PPE that are still in use and still provide economic benefit.

Posted by Choivo Capital > 2018-12-06 20:54 | Report Abuse

If this was tropicana with a power plant. And selling at the current valuation of tropicana.

It would be an easy buy.

Posted by Icon8888 > 2018-12-06 21:02 | Report Abuse

buy a bit lah Jon

later can bring girl friend to vacation

Posted by Icon8888 > 2018-12-06 21:02 | Report Abuse

later will go up

Posted by qqq3 > 2018-12-06 21:07 | Report Abuse

just wait a couple of weeks......wouldn't drop much anyway.....

Posted by Choivo Capital > 2018-12-06 21:11 | Report Abuse

icon8888,

Its because you're in it that im tempted. Because i know you're no fool.

But aiyah, cannot, bad habit. Must be very sure only can buy!

See lah, warrant out, if 15 sen or less. I think 1% can consider haha.

Posted by soojinhou > 2018-12-06 21:13 | Report Abuse

I'm happy to punt some warrants if I can get below 10c

Posted by qqq3 > 2018-12-06 21:14 | Report Abuse

but who will subscribe 25 sen and immediate sell 10 sen?

Posted by qqq3 > 2018-12-06 21:16 | Report Abuse

want to buy 15 sen also got to wait first....

Posted by Choivo Capital > 2018-12-06 21:20 | Report Abuse

EBIT: RM227mil
Depreciation: RM312mil

If we use my calculation (not management), operating cashflow is about RM539mil. After interest cost of say RM350m. THat is rouugh fcf of about RM189m.

Even if all the FCF is used to pay the principal, by the end of the 25 years (yes, i took into account interest in terms of reducing balance). There is about RM3.24bil left.

The only way this works, is if they can transfer some debt over. Need to find out here.

Posted by Icon8888 > 2018-12-06 21:20 | Report Abuse

10 Sen....

I am drooling....

Posted by Icon8888 > 2018-12-06 21:24 | Report Abuse

Jon go buy some lah. Uncle later will ramp it up

If you don’t buy, you have no feel.

Posted by qqq3 > 2018-12-06 21:24 | Report Abuse

Choivo Capital > Dec 6, 2018 09:20 PM | Report Abuse

EBIT: RM227mil
Depreciation: RM312mil
==========

when they listed Malakof...it was based on figures worse than that.....they call it Enterprise value some more.....no need depreciation, no need interest cost......see...stock market very creative when time to be bullish.....

or when Jho Low is involved......

Posted by Icon8888 > 2018-12-06 21:25 | Report Abuse

I have been punting for so many years still alive and kicking. No need warren Buffett one

Posted by Choivo Capital > 2018-12-06 21:32 | Report Abuse

Haha.

I'm wired differently lah.

Good luck though. I hope you make a lot of money.

Posted by soojinhou > 2018-12-06 21:42 | Report Abuse

Well, the exercise price is significantly higher than the share price of the mother. So it won't be easy to get below 10c, but not impossible. Maybe a few Trump tweets will do it. Let's see. Since I'm punting, not investing, I'm looking for a bargain, no bargain no punt.

Posted by Choivo Capital > 2018-12-06 22:21 | Report Abuse

I calculated wrong.

Using my estimates, the stake is worth 360m when discounted at 5%. With IRR on the 603m at 13%.

Cash IRR is 40.8%

IF my estimates, which are RM350m higher in cashflow than management/kyy estimate.

Someone needs to check with them. Which does he mean!

EBIT or EBITDA

===
Someone needs to check with management if its correct.
06/12/2018 22:01
X
Choivo Capital If my best case estimates is correct. Worth a punt.
06/12/2018 22:02

Posted by Sslee > 2018-12-06 22:44 | Report Abuse

Dear Choivo Capital,
The EBIT 200-300 million estimate by koon was using exchange rate of 3.82 USD-MYR. EBIT will increase assuming tariff shall increse by certain % per year. If base on above the FCF after interest and principle payment should increase year by year.
Thank you

Posted by Choivo Capital > 2018-12-06 22:47 | Report Abuse

Dear Sslee,

The calculations above is correct. The FCF does not change, because redued interest cost meant higher principal payment.

if 200m EBIT. Well. We are going to need very very very stron rate increases to make up for the 312m cashflow from the depreciation in my estimate.

Posted by qqq3 > 2018-12-06 23:23 | Report Abuse

by qqq3 > Dec 6, 2018 11:21 PM | Report Abuse X

ed by Choivo Capital > Dec 6, 2018 10:25 PM | Report Abuse

Ok, i checked my figures.

I calculated wrong.
============

so are u going to write an apology or not? better still with revisions and new thread.

Posted by Choivo Capital > 2018-12-06 23:23 | Report Abuse

Turns out it's not I too Warren buffet.

Its that I'm a stupid version of him.

The errors I made in my calculations was so bloody stupid and obvious.

Must actually do out the cash flows moving forward.


===

Posted by Icon8888 > Dec 6, 2018 09:25 PM | Report Abuse

I have been punting for so many years still alive and kicking. No need warren Buffett one

Posted by Icon8888 > 2018-12-06 23:31 | Report Abuse

What has Jon calculated wrong ?

Posted by Icon8888 > 2018-12-06 23:35 | Report Abuse

This accountant very scary

Posted by i3Value > 2018-12-06 23:39 | Report Abuse

Jonathan Choi Yi Kit, you shame BDO and all partners. I hope you learn nothing at BDO because if this is what BDO teach then they are an audit firm waiting to die.

What rubbish you writing? You dont have any numbers about the power plant and you dare do a valuation, expected returns. You quote KYY for top line but you dont know if he talking about EBITDA or net profit or is that amount 100% or 30%. This is basis of your calculation. Anyone cant even confident the basis sure will stop already.

You continue extract number from a different company and extrapolate to Jaks. Can you extract numbers bulat bulat from QL and apply it to Lay Hong for valuation? Can you? How much you know EVN that allow you tbuta buta fit their number into Jaks power plant? This is ridiculous.

Not a single number you use is reliable or justifiable. This is absolute rubbish.

You have no business trying to do valuation. You have no idea how to do valuation. You dont even understand the basics of valuation.

This is irresponsible article.

You buat malu ICAEW and MIA. Malu besar!

Posted by probability > 2018-12-06 23:45 |

Post removed.Why?

Posted by i3Value > 2018-12-06 23:45 | Report Abuse

Jonathan Choi Yi Kit, Jaks is not for you. No moat. Boat also dont have. So stay away, dont buy.

We need people who write proper things so that we can make decision. This article write unacceptable rubbish. Very irresponsible.

Posted by Icon8888 > 2018-12-06 23:48 | Report Abuse

Like qqq3 always said , rubbish in rubbish out

Without any proper information, Jon came up with a valuation of a billion dollar project stretching over 25 years

Seasoned finance experts don't do things like that

Jon, do you now understand why I totally didn't bother to response to your solicition for opinion this afternoon lunch time ?

Posted by Icon8888 > 2018-12-06 23:50 | Report Abuse

You might not be aware, what you did today has done huge damage to your own reputation

It shows the poor quality of your judgement

Posted by probability > 2018-12-07 00:06 | Report Abuse

will he delete this blog by tomorrow?

Posted by Choivo Capital > 2018-12-07 01:27 | Report Abuse

?

Without proper information? Well none was given. I dont have a copy of the PPA.

How else to buy, unless you decide for yourself how much it is worth? And what can you do beyond making an educated guess. And try to avoid any mistakes.

Btw, apparently KYY said 200m EBITDA, that was also what my friend who spoke with the MD told me he hinted.

In which case, it appears the best case scenario does not apply, and it relies heavily on strong rate hikes to be profitable.

You guys have so much experience? Well, show me your world bank ipp estimate for jaks.

I put my thought process down on paper. Icon got 6 articles to push people to buy, all of them don't go beyond "I guess it should be good, can gamble". Vietnam should pay for others, without actually seeing the clauses in the PPA or even a sample from vietnam.

Don't see anyone complaining there.

Cute lah you guys.

Anyway thank god i wrote it down. Otherwise i would never have realized where i went wrong. I don't do much projections on paper to begin with.

Posted by qqq3 > 2018-12-07 01:46 | Report Abuse

y Choivo Capital > Dec 7, 2018 01:40 AM | Report Abuse

What did i calculate wrong? Simple.

=========

its ok choi...Deloittes signs off 1 MDB too.

Posted by Choivo Capital > 2018-12-07 01:52 | Report Abuse

What did i calculate wrong? Simple.

I didnt bother calculating KYY estimate, since i know, if use his figures, sure dead.

Mine, well, i didnt bother since we have a better source , ie kyy mouth.

But having thought abit, i felt mine should be profitable if worked out, since it had cashflow from depreciation as i used EBIT.

Having did it up using my own valuation using my estimates, i found out it was 11% irr (instead of the roughly single digit IRR when i did it in my head), which is pretty good, and by my valuation, at this price, the company is probably in "not stupid" investment category.

Its not smart at RM1, and probably stupid above that.

So i needed to find out if its true. Turns out, kyy's estimate is probably the right one (according to a friend who spoke to the MD at the AGM, and the md hinted as such), but we'll find out in 2 years i guess.

Logically, i still think my estimate should be correct, as i don't see how it would work other wise, but, oh well.

Got better things to buy.

Its quite rare to find people who are happier than me, except in a derogatory way, when i find out i'm wrong.

having said that, i'm not the one staring at paper losses in Jaks. So i understand. I would be emotional if my rcecap was down 50%, even if i tried really hard not to be.

For your sake, i hope my estimates instead of KYY's/management is right.

Or vietnam govt really going to guarantee top to bottom for you.