the problem is you expect it to fly after you buy. go back and look at other charts, companies like PPB, QL, or Harta (Before covid) had a few years of flat share price, sometimes as long as 4 years, then it flies. sometimes 2 years, we dont know. The key is to buy a company that wants to grow their earnings and wait.
@steady31 Are you sure you are looking at the right chart? With exception for the panic selling at the early stage of pandemic in March 2020, from Jan 2020 to June 2022, the stock price (adjusted for stock split) appreciated 44% excluding dividend. If you had collected it during the march 2020 selloff, you would have made 140%.
Obviously EDL will collect the bill. EDL also owns 10% or was it 20% of Don Sahong, not sure which. Don Sahong is generating foreign cash for Laos. 25 years later, they will have the entire dam. They want FDI to come in and build dam to generate power to sell to the entire SEA and China, thus they know they need to honor their words regardless of what.
Their goal is to be the battery of SEA, by selling power to many countries including Singapore via Thailand-Malaysia.
"Laos had the chance to sign up for the World Bank’s Debt Service Suspension Initiative but decided instead to go down the path of direct debt restructuring arrangements with China, its largest creditor. That saw Electricité du Laos, the state-run power company, partially sold off to a Chinese firm."
- DSH sells 100% power to Cambodia, not Laos - DSH earn USD for Laos, Laos needs all the USD they can get. - EDL is partially own by China - Laos gov owns 20% of DSH - DSH is profitable for all parties - Unlikely for Laos to nationalize any foreign dam, this will chase away FDI which they badly needs. - The risk is high, thus explains the very low PE, at PE7. - Very likely China will help Laos to roll over the debt, push the problem down the road so to speak. - Unlikely for China to let Laos collapse and allow countries like USA to be friendly to Laos. China will not want to see IMF or World Bank bail out Laos and to have a say in how Laos is run - becomes a democracy. - China will do whatever it takes to prop up Laos, just like how China prop up North Korea. Better to have a friendly nation at your border than to have an enemy with US putting missiles on Laos soil. China is already not on good terms with vietnam. - Will EDL delay payment? Possible. This is the biggest risk factor. - Will EDL renego the contract? Possible but unlikely. if they do, it will probably extend the 25 years to 30 years or more.
I see MFCB as a high risk investment on the short term, if nothing bad happens within this coming 10 years, they would have made enough to diversify into other business to balance their cash flow.
Currently 90% of their profit comes from the hydro, based on my calculation, if all things goes accordingly, 10 years time it will be 50% hydro and 50% others. Which is good enough.
I understand the management is focusing on renewable and ESG, I still think ESG is just a scam. If the bankers and funds are so concern about ESG, MFCB would not be at such low valuation, right? In the end, it is all about profits.
Thus, I dont understand why they choose not to continue their coal or gas power plant. They should just build more, or buy up some palm oil plantation when palm oil price crash, not now. Do whatever it takes to boost earnings. ESG is a scam and renewables are not profitable.
Quote: "A common concern is with regards to high receivables and potential bad debt. In Q4 2020, management guided that increment in receivables was due to December payments came in January due to late acceptance in EDC which subsequently causing EDL to pay late. By Feb, receivables had gone back down to 3-4 months. Management also mentioned that EDL will not be bankrupt as it’s guaranteed by the MOF."
p.s. I can't post the URL or PDF file. i3 dont allow me to. The info is by Rondy, go check his website, the pdf if there, he is the host for MFCB live AGM.
Quote Public Bank Report 21/6/22: "Troubled state-owned electricity operator, Electricite du Laos (EDL) accounted for nearly a third of publicly-guaranteed debt last year and much was owed to the Electricity Generating Authority of Thailand. This raises concerns over the collection for MFCB’s 80%-owned Don Sahong Hydropower plant. Nevertheless, we think that it is unlikely to see payment defaults from EDL as the electricity is effectively sold to neighbouring Cambodia under a 700MW G-to-G PPA contract signed in 2019. We understand that there is a legal arrangement for EDL to use the proceeds from the sale of electricity to Cambodia for the payment to Don Sahong Hydropower before it is allowed to be used for other purposes."
To simply summarise: 1) EDL payment a function of whether EDC pays EDL. Cambodia needs power & is in much stronger financial position than Laos. 2) Legal arrangement for EDL to pay EDC proceeds to MFCB *FIRST* before they can use balance for own purposes.
@LongTermInvestor8 Thanks for the details. Looks like just posted today by PBB. Good thing Finance Minister addressed on this concern a few hours ago. Lao Finance Minister Bounchom Oubonpaseuth has assured National Assembly (NA) members that public debt is still manageable, despite the total amount remaining considerable, Vientiane Times reported. https://en.vietnamplus.vn/laos-public-debt-remains-manageable-minister...
Singapore began receiving hydropower from Laos wired through Thailand and Malaysia on Thursday, the city-state’s first renewable electricity imports as it looks beyond its borders to meet climate change goals.
aiyo hengyuanzai , please lar, when comment please dun just comment half half.
(i) you said many hidden problem, what's that? at least elaborate it lar (ii) drop below 3.00 in a few months ? how long ?
this counter YTD drop only 4 ~ 5% & I believe outperform at least 80% of the counters in Malaysia, what else you want? I've been follow this counter for more than 2 years after hydropower plant started operates, also attended few post QR briefing, so please be responsible when you give comment, else just don't comment. Cash flow, trade receivable all are ok, so i really don't know what's your "hidden problem".
HengyuanZai, I dont think you understand how it works. They dont really transfer from Laos to Singapore. Simply put it Malaysia will sell to Singapore, Thailand will sell to Malaysia, and the Laos sells to Thailand. Contra it, and Singapore will pay for it.
“We do not foresee the current crisis in Laos to have a significant impact on MFCB. The power generated by DSPC in Laos is 100% evacuated to Cambodia via two government-to-government power purchase agreements signed between Electricite Du Laos (EDL) and Cambodia’s Electricity Authority (EDC),” MFCB executive director Khoo Teng Keat tells StarBizWeek.
Elaborating, Khoo says revenue collection is smooth.
“Cambodia’s EDC has been prompt in its payment to EDL. In turn, EDL has been paying DSPC every month,” he adds.
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....