@DK66, sorry i have not been following your discussion recently in i3 completely..
The above earnings derivation with project IRR seems in line with what i had estimated excluding interest like i had expressed earlier. So, have you changed your opinion on the Interest cost inclusion for Project IRR?
Probability, I must have misunderstood you completely. When I said the FCF must have included the interest cost. This is what i meant here. Is this what you meant also when you said interest cost must be excluded ??
--------------- probability @DK66, sorry i have not been following your discussion recently in i3 completely..
The above earnings derivation with project IRR seems in line with what i had estimated excluding interest like i had expressed earlier. So, have you changed your opinion on the Interest cost inclusion for Project IRR?
so it means you had used FCFF for Project IRR exactly like had mentioned.
I thought you were saying to use FCF-E (meaning excluding interest cost) of 1271 to derive the reported project IRR of 12%.
.........
You can see that Icon8888 did not use the above FCFF method when he derived the profit working back from IRR of 12%. He used FCF-E and thus inflating the profit for a given IRR.
That was the reason the debate between us earlier, where you had supported Icon method was correct.
Probability, Icon8888 is using EBITDA as cash flow in its IRR calculation. This effectively included the interest cost in his IRR calculation. This is in line with my calculation here.
Probability, I agree with you. Icon8888 should be using the Ebitda as FCF. Instead, he used a net of interest figure in his IRR calculation. I m sorry, I did not read his article in detail. I thought he was using Ebitda.
You should have pointed it out to me the way you did just now and we wouldn't be having all the arguments. In any case, the fault is mine. I apologise to you.
DK, my original estimation on 1RR for Vinh Tan 1 based on reported earnings is about 15%.
so if you exclude 12% from that , its about 3% for energy payment.
Even if you discount 20% due to efficiency on 3%, its just abut 0.5% reduction in IRR.
............
To me the Dividend from Mong Duong 2 which comes fairly close to the earnings of Vinh Tan 1, gives quite a bit of confidence that JHDP will perform similarly.
so the earnings estimation is no longer a concern for me at all ...............................................................
only remaining concern is if Jaks could raise their stake to 40% without seeking existing investor to take out from their pocket
This article proves that all Vietnam IPP BOT have roughly the same PPA payments from EVN except that they must keep the power plants in good running order in order to achieve full capacity payments.
In a year to two, when the power plant is in full swing, share px would be following suit. At that time, dont be surprised , shareholders n institution may be pleading for the company for RI ! Moving to 40% is risk-free to Jaks and with an upside of 33% to earning !In any case with FCF of at least rm300M annually, Jaks could easily take its rightful share of 40%
theory is in line with Vinh Tan 1 power plant, their deputy director also said they will be able to pay off all debts and start generating profits 18 years after the plant starts commercial operation.
elbrutus and johnmasino, There are people who are in constant denial.
Both projects secured USD1.4 billion in borrowings. The power plants are non-movable so as good as no securities in the eyes of the chinese bankers. If the power plants do not have similar earnings capability, will the bankers lend the same amount of loan ? That is common sense.
but they beg to differ cum no paperwork to back up their claim...funny world !!! ...why cant people learn to respect other people presentation without smearing their integrity !!! ...shameful lot
elbrutus, you are right, the best way to refute or proof of different views is to present it systematically in an article so that it will remain on the headline of Jaks forum forever. Everyone will see it. There is no need to repeat the same arguments over and over again.
When you reject someone's TP, shouldn't you provide your own TP to be credible?
I have revised my NOTE 1 to reflect a more realistic scenario where the net profit should be expected to increase when interest cost decreases over time.
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
DK66
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Posted by DK66 > 2020-05-16 19:58 | Report Abuse
elbrutus, thanks for your "Like"