Year 2021 could be a volatile year, Mega First Corp Bhd's steady and resilient earnings from the 260MW Don Sahong hydropower project could be a shelter.
It is noteworthy that besides resilient earnings, Mega First is also a company to look out for renewable energy theme play as policymakers globally are stepping up efforts to meet ambitious climate targets.
Maybank IB analyst Tan Chi Wei wrote, in its 2021 strategy report, that Mega First appears undervalued. From an 18.9 times P/E in 2019, this counter is expected to have a P/E of 9.8 times in 2021.
"Backed by Don Sahong's strong cash flow, Mega First has the means to pursue new growth opportunities and/or increase cash distribution to shareholders," he added.
For net profit, Tan is projecting its net profit to be at RM323 million in the financial year ended Dec 31, 2020 (FY20) and RM340.1 million in FY21, compared with RM152 million in FY19.
The forecast big leap in earnings is due to the hydropower project, which is expected to generate annual net profit attributable to shareholders of between US$60 million and US$70 million during its 25-year concession period starting from FY20.
According to Bloomberg data, with a consensus target price of RM8.31, this implies a 20% upside from its closing of RM6.90. All three research houses covering this counter have "buy" calls.
Another alternative for renewable energy play could be KPower Bhd, which is one of the top picks of RHB IB and AmInvestment Bank Bhd.
RHB IB said KPower is firmly on its growth trajectory and is expected to double its order book size by end-FY21. "The stock, in our view, could undergo a further rerating, if KPower can penetrate the solar industry, which generally fetches premium valuations," said the research firm.
Public invest latest report re iterated tgt price of rm 8.62. For the first time , Public invest highlite the potential 50 years concessions of about 10000 ha coconut plantation owned by mfcb.
Based on public invest latest report, the share price of mfcb is at PE 9x of forward earning. This valuation is unappreciated based on tindustry PE of 14x. There is an upside of 35 %.The Don Sahong power plant also expect the highest availability factor for Q4 2020 which is the wettest qtr.At the point of writing this comment, the share price has risen 28 sen to 7.00,
New IPO: Building management systems (BMS), solar thermal systems and energy-saving services provider, Solar District Cooling Bhd aims to list on the Ace Market!
MQ Trader 252 views | 1 d ago
0:17
New IPO: The onshore and offshore support services provider for the O&G industry, Steel Hawk Bhd aims to list on the Ace Market!
MQ Trader 11339 views | 9 d ago
0:17
New IPO: The largest mini-market player and a leading groceries retailer in Malaysia, 99 Speed Mart Retail Holdings Bhd aims to list on the Main Market!
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....
kenken85
724 posts
Posted by kenken85 > 2020-12-28 15:53 | Report Abuse
congrtas philan. kpower is higher than mfcb now. haha.