Posted by lawrgan > 2020-05-06 23:15 | Report Abuse

Probability, what you are concerning is absolutely correct....we think you should move on to other counters. Lol

Posted by DK66 > 2020-05-06 23:31 | Report Abuse

Just a final word. If it only costs Vinh Tan 1 USD1.75b to build a supercritical plant, why would JHDP not build a supercritical plant but instead paid USD1.87b to build a subcritical plant ?

Won't JHDP be interested if the profit differential is so big ? or there are other costs to be concerned with ?

I just do not know.

Posted by DK66 > 2020-05-06 23:34 | Report Abuse

Many are busy coming up with their own estimates and projections. I m currently answering to 3 of them privately through emails.

I suppose the close proximity of plant COD is drawing a lot of interest lately.

Posted by DK66 > 2020-05-06 23:38 | Report Abuse

These are very smart people and I m glad that they are sharing their insights with me. I suppose this is the good karma I got from my sharing in I3.

Posted by DK66 > 2020-05-06 23:44 | Report Abuse

Also, I don't think I will get any response from good people like RangerJ if I m a nasty person and never shared in i3. Am i right, bros ?

-----------------------------------------
Stock: [JAKS]: JAKS RESOURCES BHD

May 6, 2020 12:59 PM | Report Abuse

Hi DK66, Very kind words, thank you. As icon8888 mentioned, there is reliability (availability) guarantee on top of efficiency guarantee. Efficiency is not constant, as there will be degradation over the PPA period. Personally, I won't lose sleep over these matters at this point. Wishing you all the best. Thank you.

***********
DK66 I m grateful that you created a new ID just to relay the information to us. Really appreciate that.

Do you have information on the effect of efficiency of power plant on earnings ?

06/05/2020 1:06 AM

Posted by pjseow > 2020-05-06 23:47 | Report Abuse

DK66, I supposed my son Jonathan is one of the 3 asking you some questions privately. He came up with a spreadsheet detaling the earnings , cash flow etc for 25 years with some assumptions mainly from your previous articles. Hope you can help to clarify some of his questions. His spreafsheet also seperate.capacity payment and energy payment. Thanks

Posted by DK66 > 2020-05-06 23:50 | Report Abuse

Pjseow, yes he is. We are exchanging emails. No worries. Maybe he can consider posting an article for the benefit of everyone here ?
-------------------
pjseow DK66, I supposed my son Jonathan is one of the 3 asking you some questions privately. He came up with a spreadsheet detaling the earnings , cash flow etc for 25 years with some assumptions mainly from your previous articles. Hope you can help to clarify some of his questions. His spreafsheet also seperate.capacity payment and energy payment. Thanks
06/05/2020 11:47 PM

Posted by pjseow > 2020-05-07 00:04 | Report Abuse

Let me talk to him. He is very busy with a full time job in Korea. He is afraid that he may not have the time to answer queries.

Posted by DK66 > 2020-05-07 00:07 | Report Abuse

pjseow, thank you.
-----------
pjseow Let me talk to him. He is very busy with a full time job in Korea. He is afraid that he may not have the time to answer queries.
07/05/2020 12:04 AM

Posted by Aseng > 2020-05-07 08:59 | Report Abuse

Good morning my good friend

1. As a smart investor we must have the wisdom to tell which assumptions and calculation is more logical and reasonable.

2. I choose to believe icon8888 regarding the doubt probability had raised up about the impact of the energy efficiency on the hai dong earning presented by DK66 in his peer comparative valuation

3. Based on my mathematical sense, I strongly do not believe agree the theoretical 18% impact on the net profit.

Reason :
1. 80% of the net income is derived from capacity payment (Icon8888)
2. No reason Hai Dong used more money to build a lower grade power plant (Dk66)
3. Higher grade plant will have higher O&M expenses







Stock: [JAKS]: JAKS RESOURCES BHD

May 6, 2020 6:32 AM | Report Abuse

I think probability does not yet have a proper understanding of the IPP model.

You don’t actually need to give too much weightage to thermal efficiency etc

As a banker that handles Malakoff when I was working, i have the chance to deeply understand their cash flow and profit (btw, Malakoff auditor and reporting accountant was KPMG). : )

(For your info, Malakoff has 5 IPPs under its wing and I have chance to know all of their details)

In Malakoff IPP case , 80% of the profit is capacity payment, the rest 20% is energy payment

Meaning 80% of the profit is independent of operational cost or electricity production . As Long as you provide the plant at let’s say 95% capacity availability , the customer (government) will pay you in full (that is why it is called Take or Pay). This is called capacity payment. And as mentioned above, it makes up 80% of the profitability

Then there is this thing called energy payment. You sell energy to the customer (in this case , Vietnam government). The more you sell, the more the customer pay you. That is of course the revenue level. As for cost, items beyond the operator’s control such as coal price etc, is cost passed through. The higher the coal price the higher the electricity selling price to the customer and vice versa . However，for items such as salary, chemical, maintenance etc, those are not allowed to be passed through . This is to ensure the operator maintain certain level of efficiency (be thrifty, lean and mean etc)

The energy payment makes up only 20% of profitability

As such, when come to modelling, you don’t really need to care too much about energy payment related profitability . The most important thing is to ensure the plant is able to deliver the capacity availability as stipulated in agreement then you can pocket 80% profitability already

Posted by Aseng > 2020-05-07 09:01 | Report Abuse

Probability,

I hope my mathematics sense will help to clear some your doubts and convince you jaks is indeed a good buy at current price.

Posted by Aseng > 2020-05-07 09:12 | Report Abuse

Honestly speaking we are wasting to much time talking too much on the topic, energy efficiency, that nobody, of course including probability himself can not provide an accurate answer. But my pitiful brother still trying his best, crack his head, to provide some.

We must be more realistic, not all problem can be solved perfectly, do not demand that, it will kill you.

Posted by ViziTrader > 2020-05-07 09:22 | Report Abuse

SOme people here is too heavy on critical thinking. Of course its good to find flaws at times to make better decision but pls avoid being too critical until your mind SUBCONCIOUSLY refused a good points of certain oppurtunities. And thats why its called OPPURTUNITY, because it hasnt materialized yet. If you want something confirmed, go for dividend stocks. We are here for the growth-prospects hence the rising stock price which will follows. Go somewhere else if u cant even fathom what 'oppurtunity' itself means.

Posted by DK66 > 2020-05-07 09:29 | Report Abuse

Aseng, You are right.

However, discussion is good regardless of outcome. At least the issue of plant design has been considered.

Posted by Alex™ > 2020-05-07 09:30 | Report Abuse

ah jak tp hw much?

Posted by Aseng > 2020-05-07 09:31 | Report Abuse

My good brother Dk66

I believe the saying
Harmony is more precious than perfection

From my comments you can read I am a fast temper person. I know i am too busy trying to correct other people mistake or action that I find hard to agree. That is my weakness and also my beauty . But I can assure you, I am also the type fast to forgive and forget. Do worry.

HAPPY WESAK DAY.



DK66>> Also, I don't think I will get any response from good people like RangerJ if I m a nasty person and never shared in i3. Am i right, bros ?

Posted by DJoker89 > 2020-05-07 09:33 | Report Abuse

So finally u guys done talkings and proving?
As said long term value investor Mar so what to worry?

Why so desperate?
Just wait lorrr.....a year or 2...sure the price will move to ur Tp.

I'm not greedy, My Tp is only 1.10 and its here
So I sold for good.

Tq

Posted by DK66 > 2020-05-07 09:36 | Report Abuse

These are very strong rationale from Aseng not to simply make adjustment on the results of Vinh Tan 1
-----------------------
Reason :
1. 80% of the net income is derived from capacity payment (Icon8888)
2. No reason Hai Dong used more money to build a lower grade power plant (Dk66)
3. Higher grade plant will have higher O&M expenses

Posted by DK66 > 2020-05-07 09:37 | Report Abuse

And Aseng needs not quote me on this point because I think anyone in right mind can understand this logic

-----------------
2. No reason Hai Dong used more money to build a lower grade power plant (Dk66)

Posted by DK66 > 2020-05-07 09:46 | Report Abuse

You probably won't find me writing more articles on earnings forecast for JHDP. It will be extremely hard for me to find better perspective to evaluate JHDP (but I hope not). I shall dig out more on the risk aspects going forward (I hope not too). Wish me luck and don't wish me luck. Haha

I m truly happy with my latest article on profit forecast.

Happy Wesak day !

Posted by Aseng > 2020-05-07 09:53 | Report Abuse

1 musang King is better that 100 potatoes

You had already served us more than 10 musang King.

That is more than enough

Over excessive may cause indigestion

Posted by Aseng > 2020-05-07 10:02 | Report Abuse

I like this sentence.
Very honest
Give a big "LIKE"


DK66 >> Wish me luck and don't wish me luck. Haha

Posted by paktua73 > 2020-05-07 10:03 | Report Abuse

morning..don't worry paktua will provide all musangking if any need..
ihik ihik


tut tut
wat bodo jer hold..

Posted by hng33 > 2020-05-07 10:14 | Report Abuse

Dear DK66

Aside focus on comparison between Vinh Tan 1 USD1.75b supercritical plant vs. JHDP USD1.87b subcritical plant ( the net differentiate is minimum given Vietnam government have no carbon tax to incentivize supercritical over subcritical), can you also look at different financing impact on earning. If no mistaken, Vinh Tan 1 is under 80:20 debt to equity financing vs. JHDP 75:25 ratio. In additional, the taxation incentive offer for Vinh Tan 1 vs. JHDP ( tax free for 4year, 5% for next few year , thereafter 10% till end 25 year concession)

Posted by DK66 > 2020-05-07 10:27 | Report Abuse

Hng33, Thank you for the information.

Yes, no carbon tax but there is a threshold on emission. Supercritical has lower emission over subcritical by 3 percentage point.

My understanding is 75:25 is the maximum ratio allowed by Vietnam government, so is the maximum loan tenure of 18 years. I understand that the government cuts short the loan tenure to 15 years for the later BOT project. Could you please substantiate your 80:20 ratio ?

The tax incentive is the same for all earlier BOT projects including Vinh Tan 1 and JHDP. I m not sure whether there was any revision for those newer projects.

-----------------------------
hng33 Dear DK66

Aside focus on comparison between Vinh Tan 1 USD1.75b supercritical plant vs. JHDP USD1.87b subcritical plant ( the net differentiate is minimum given Vietnam government have no carbon tax to incentivize supercritical over subcritical), can you also look at different financing impact on earning. If no mistaken, Vinh Tan 1 is under 80:20 debt to equity financing vs. JHDP 75:25 ratio. In additional, the taxation incentive offer for Vinh Tan 1 vs. JHDP ( tax free for 4year, 5% for next few year , thereafter 10% till end 25 year concession)
07/05/2020 10:14 AM

Posted by hng33 > 2020-05-07 10:41 | Report Abuse

When will the Vinh Tan 1 thermal power plant start generating profits?

Operating under the BOT format, the project boasts around $1.75 billion in total investment capital, 80 per cent of which is sourced from a consortium of several international banks. If the project runs smoothly without any hitches, Vinh Tan 1 Power Co., Ltd. will be able to pay off all debts and start generating profits 18 years after the plant starts commercial operation.

https://www.vir.com.vn/vinh-tan-1-gearing-up-for-operation-61958.html

Posted by DK66 > 2020-05-07 10:43 | Report Abuse

Both mong duong II and JHDP are confirmed on 75:25 ratio. It would be very surprising to see Vinh tan 1 on 80:20. This is just words from a manger of Vinh Tan 1. Could there be equity financing included ? I need to look in it.

Anyway, if this is true, it means Vinh Tan 1 has higher interest expense than JHDP which leads to lowered profit.

---------------------
When will the Vinh Tan 1 thermal power plant start generating profits?

Operating under the BOT format, the project boasts around $1.75 billion in total investment capital, 80 per cent of which is sourced from a consortium of several international banks. If the project runs smoothly without any hitches, Vinh Tan 1 Power Co., Ltd. will be able to pay off all debts and start generating profits 18 years after the plant starts commercial operation.
07/05/2020 10:33 AM

Posted by Rookieinvestor > 2020-05-07 10:49 | Report Abuse

what are your recommendation? Buy , Hold or sell
What is the TP for this stock.
Going to invest heavily soon . Just getting advise from the experts here

Posted by hng33 > 2020-05-07 10:50 | Report Abuse

Vinh Tan 1 thermal power debt financing panel, total USD 1.40 billion (80% financing cost for project cost USD 1.76 billion)

Bank of China: USD233m
China Construction Bank: USD 233m
China Development Bank (CDB): USD 233m
EX-IM Bank of China: USD 234
Industrial & Commercial Bank of China (ICBC): USD 233m
Other Sinosure Bilateral: USD234m

Posted by DK66 > 2020-05-07 10:52 | Report Abuse

Thanks for the information
---------------
hng33 Vinh Tan 1 thermal power debt financing panel, total USD 1.40 billion (80% financing cost for project cost USD 1.76 billion)

Bank of China: USD233m
China Construction Bank: USD 233m
China Development Bank (CDB): USD 233m
EX-IM Bank of China: USD 234
Industrial & Commercial Bank of China (ICBC): USD 233m
Other Sinosure Bilateral: USD234m
07/05/2020 10:50 AM

Posted by hng33 > 2020-05-07 10:53 | Report Abuse

Dear DK66

Vinh Tan 1 thermal power debt financing panel, total USD 1.40 billion (80% financing cost for project cost USD 1.76 billion)

Bank of China: USD233m
China Construction Bank: USD 233m
China Development Bank (CDB): USD 233m
EX-IM Bank of China: USD 234
Industrial & Commercial Bank of China (ICBC): USD 233m
Other Sinosure Bilateral: USD234m

https://ppi.worldbank.org/en/snapshots/project/Vinh-Tan-1-Coal-Plant-7247

Posted by DK66 > 2020-05-07 10:56 | Report Abuse

Interesting to note that all 3 BOT projects (mong duong II, JHDP, and Vinh Tan 1) borrowed USD1.4b. I suppose that is the amount banks are willing to lend to IPP of 1200MW size. In that case, the interest expense would be the same.

Posted by DK66 > 2020-05-07 11:00 | Report Abuse

I shall amend the article to reflect identical borrowings

Posted by Aseng > 2020-05-07 11:06 | Report Abuse

Do not jump into the conclusion just because Probability told you Hai Dong is subcritical. Probability hasn't proven what he said is right yet and we are so stupid to conclude he is right.

What about OTB said. He told us the IR in the company told him Hai Dong has a better specification than Vinh Tan in the meeting.


DK66 >> If it only costs Vinh Tan 1 USD1.75b to build a supercritical plant, why would JHDP not build a supercritical plant but instead paid USD1.87b to build a subcritical plant ?

WHAT YOU SAY?

The Chinese businessman is stupid or we are stupid?

Please forgive my crude word "stupid"
Just serve to amplify the emotion nothing else.

Posted by DK66 > 2020-05-07 11:08 | Report Abuse

The fact that Banks are willing to lend the same amount ( usd1.4b) to all these 3 BOT projects is a reflection of the similarity on the expected earnings from these power plants. - Another strong point for Aseng

Posted by karimboss > 2020-05-07 11:10 | Report Abuse

Dangerous complicated stock

Posted by DK66 > 2020-05-07 11:11 | Report Abuse

After gathering enough points, Aseng can consider writing an article.

Posted by hng33 > 2020-05-07 11:13 | Report Abuse

The financiers for JHDP are the Industrial and Commercial Bank of China, China Construction Bank Corporation and Export-Import Bank of China, same bank panel as Vinh-Tan

Posted by Aseng > 2020-05-07 11:14 | Report Abuse

I wish to repeat and reaffirm what I said before.


DK66 peer comparative valuation is true and correct. Icon8888 IRR analysis provided a good reason to support what I said.

A good investor must have the wisdom to tell which calculation is reasonable and reliable.
If not, you better put your money under the pillow.

Posted by DK66 > 2020-05-07 11:15 | Report Abuse

Yes, these are always the Bankers for international project financing.
--------------------
hng33 The financiers for JHDP are the Industrial and Commercial Bank of China, China Construction Bank Corporation and Export-Import Bank of China, same bank panel as Vinh-Tan

Posted by hng33 > 2020-05-07 11:17 | Report Abuse

The financiers for JHDP are the Industrial and Commercial Bank of China, China Construction Bank Corporation and Export-Import Bank of China, same bank panel as Vinh-Tan. but, Mong Duong II financier are total different, nil china own banker, all western bank, korean and japan bank due to fact the plant majority own by US company

Posted by Aseng > 2020-05-07 11:17 | Report Abuse

Hng33,

Sorry har.... I read the first sentence sudah beh-ta-han.
Now I will continue reading
Very very sorry har....

Posted by DK66 > 2020-05-07 11:19 | Report Abuse

What Aseng is saying is "get to the point !"
-----------------
Aseng Hng33,

Sorry har.... I read the first sentence sudah beh-ta-han.
Now I will continue reading
Very very sorry har....
07/05/2020 11:17 AM

Posted by hng33 > 2020-05-07 11:25 | Report Abuse

The point is that whether or not the same banker evaluate Vinh Tan 1, project cost USD1.75b vs. JHDP project cost USD1.87b based on their supercritical plant vs. subcritical plant OR based on power plant 12% project internal rate return?

Posted by DK66 > 2020-05-07 11:26 | Report Abuse

The artilce has attracted over 8000 visits ! Must have been heavily shared among friends.

Jaks Resources - The Most Reliable Earnings Guidance for JHDP

https://klse.i3investor.com/blogs/Jaks%20resources/2020-05-01-story-h1506848575-Jaks_Resources_The_Most_Reliable_Earnings_Guidance_for_JHDP.jsp

Posted by DK66 > 2020-05-07 11:30 | Report Abuse

iswara, mind to share your knowledge on the 3% base ? Thank you
------------------
iswara 1.4b >> interest 42m 3%base
07/05/2020 11:27 AM

Posted by hng33 > 2020-05-07 11:34 | Report Abuse

Due to that fact it is long term 25 year concession, the higher the specification of supercritical plant, the higher the amortization and depreciation + higher operation cost + maintenance service to upkeep equipment. These all factors will offset supercritical plant higher efficiency. Without carbon tax incentive, the nett impact on profit is minimum

Posted by DK66 > 2020-05-07 11:53 | Report Abuse

hng33, your point is logical but that is assumption too. Only the point on carbon tax is factual. I don't think Vinh Tan 1 has higher amortization as it has similar cost structure.

Posted by OTB > 2020-05-07 12:22 | Report Abuse

Posted by hng33 > May 7, 2020 11:25 AM | Report Abuse

The point is that whether or not the same banker evaluate Vinh Tan 1, project cost USD1.75b vs. JHDP project cost USD1.87b based on their supercritical plant vs. subcritical plant OR based on power plant 12% project internal rate return?
-------------------
CEEC is the contractor for Vinh Tan 1 project only.
CEEC/CPECC is the contractor and also the owner for JHDP.

CEEC built a "Supercritical" plant for Vinh Tan 1 project.
Do you think that CEEC/CPECC is so stupid to build a "Supercritical" plant for Vinh Tan 1 project and build a "subcritical" plant for JHDP ?
I was told JHDP is more superior in design than Vinh Tan 1 plant because CEEC/CPECC is the contractor and also the owner of JHDP power plant.

In initial design and proposal stage, IRR 12% was proposed to Vietnam government.
IRR should be 15% for 7,238 utilization hours and 8.2B kwh output for actual JHDP power plant when it is ready.

The actual IRR for Vinh Tan 1 plant is 15%, likewise, JHDP power plant.

I was told by the management of Jaks during the meeting. It is confirmed via phone call in front of me by the chief engineer of CEEC in Vietnam on the spot when I ask this question.
Thank you.

Posted by DK66 > 2020-05-07 12:24 | Report Abuse

OTB, thanks for the information.