Posted by DK66 > 2020-05-07 12:25 | Report Abuse

Seems like Aseng will now apply premium instead of discount to Vinh Tan 1's results.

Posted by OTB > 2020-05-07 12:32 | Report Abuse

I do not know whether the project cost of USD1.87B for JHDP and USD1.75B for Vinh Tan 1 respectively is due to better design of JHDP.
I was told JHDP has a better design than Vinh Tan 1 because JHDP is built later and has a better design improvement after Vinh Tan 1.
Thank you.

Posted by probability > 2020-05-07 12:40 | Report Abuse

@DK66, on Icon's IRR 12% derivation comments section, i could not find your explanation on why the interest should be included when its a Project IRR.

I had presented my resources on why Icon's calculation is incorrect here:

http://infrastructure-projectfinance.blogspot.com/2013/11/project-irr-vs-equity-irr.html

http://ecapslock.com/project-irr-vs-equity-irr/


Internal Rate of Return (IRR)
.............................

Internal Rate of Return (IRR) is a rate on which NPV of the project equals to zero i.e. value arriving by discounting all the cash flows of the project with IRR rate will be zero.

Project IRR (PIRR) and Equity IRR (EIRR)
........................................

The project is generally financed in some proportion of Debt and Equity.

The project IRR gives the rate of return from the whole project. It is calculated presuming that there is no debt portion in the project financing. It calculates the rate of return considering the cash flows from the project only (i.e. except financing cost). Project IRR will remain same irrespective of capital mix of the project.


The above is not matching Icon's derivation here:

https://klse.i3investor.com/blogs/icon8888/2020-05-01-story-h1506818792-_Icon_Jaks_Resources_IRR_Model_Shows_That_RM300_mil_Net_Profit_p_a_For_.jsp


Its has significant impact on earnings estimation, as such kindly elaborate on this.

Thank you

Posted by DK66 > 2020-05-07 12:40 | Report Abuse

I find it uncommon to attach 2 boilers to a turbine. Maybe that is the cause for slightly higher costs.

Posted by DK66 > 2020-05-07 12:41 | Report Abuse

I read somewhere this will improve efficiency

Posted by VIN3133 > 2020-05-07 12:49 | Report Abuse

Thumbs up , OTB !!
You have timely dropped by to provide reliable info & put to rest those uncertain issues , loud & clear !!
TQ

Posted by OTB > 2020-05-07 12:55 | Report Abuse

Posted by DK66 > May 7, 2020 12:40 PM | Report Abuse

I find it uncommon to attach 2 boilers to a turbine. Maybe that is the cause for slightly higher costs.
-----------
Dear DK66,

You are right on these 2 items.
I was told these items are better modifications from Vinh Tan 1.
Likewise, the cooling system.
Thank you.

Posted by DK66 > 2020-05-07 12:56 | Report Abuse

Probability, I m absolutely confident that the interest costs is included. It is difficult for me to reply using mobile.

Posted by DK66 > 2020-05-07 12:58 | Report Abuse

Don't you find Vinh Tan results more convincing ? If interest is excluded from Vinh Tan, what would the project IRR be ? More than 30%?

Posted by SarifahSelinder > 2020-05-07 13:01 | Report Abuse

U ni x reply jz pusing pusing?!


SarifahSelinder Yg ni u kira guna IRR cara mcm mana? Same cara DK66? 

probability  

my JAKS earnings projection still stands about max 160M per year

06/05/2020 7:33 PM




probability @DK66, on Icon's IRR 12% derivation comments section, i could not find your explanation on why the interest should be included when its a Project IRR. 

I had presented my resources on why Icon's calculation is incorrect here: 

http://infrastructure-projectfinance.blogspot.com/2013/11/project-irr-vs-equity-irr.html 

http://ecapslock.com/project-irr-vs-equity-irr/ 


Internal Rate of Return (IRR) 
............................. 

Internal Rate of Return (IRR) is a rate on which NPV of the project equals to zero i.e. value arriving by discounting all the cash flows of the project with IRR rate will be zero. 

Project IRR (PIRR) and Equity IRR (EIRR) 
........................................ 

The project is generally financed in some proportion of Debt and Equity. 

The project IRR gives the rate of return from the whole project. It is calculated presuming that there is no debt portion in the project financing. It calculates the rate of return considering the cash flows from the project only (i.e. except financing cost). Project IRR will remain same irrespective of capital mix of the project. 


The above is not matching Icon's derivation here: 

https://klse.i3investor.com/blogs/icon8888/2020-05-01-story-h1506818792-_Icon_Jaks_Resources_IRR_Model_Shows_That_RM300_mil_Net_Profit_p_a_For_.jsp 


Its has significant impact on earnings estimation, as such kindly elaborate on this. 

Thank you

07/05/2020 12:40 PM

Posted by DK66 > 2020-05-07 13:01 | Report Abuse

Vietnam has allowed 75:25 debt ratio as a mean to derive the Project IRR using 6500 hours. Doesn't that include interest cost as consideration?

Posted by DK66 > 2020-05-07 13:04 | Report Abuse

If you could explain the results of Vinh Tan 1 under the assumption that the interest cost is excluded, then further discussion shall be meaningful.

Posted by SarifahSelinder > 2020-05-07 13:17 | Report Abuse

Probability

Rephrase ur question properly

Posted by Aseng > 2020-05-07 13:19 | Report Abuse

OTB,

finally we are good friend again.

welcome home .

Posted by Aseng > 2020-05-07 13:22 | Report Abuse

DK66,

certainly I will .



Posted by DK66 > May 7, 2020 12:25 PM | Report Abuse

Seems like Aseng will now apply premium instead of discount to Vinh Tan 1's results.

Posted by DK66 > 2020-05-07 13:22 | Report Abuse

Dear All, Bad news !

Posted by DK66 > 2020-05-07 13:22 | Report Abuse

I m denied access to i3

Posted by DK66 > 2020-05-07 13:23 | Report Abuse

My IP address was blocked

Posted by DK66 > 2020-05-07 13:23 | Report Abuse

I m typing using mobile data

Posted by Aseng > 2020-05-07 13:23 | Report Abuse

HNg33,

today you are a Hero.

you had saved our life from probability wrong assumption

thank you very much

Posted by DK66 > 2020-05-07 13:24 | Report Abuse

Very inconvenient for me

Posted by DK66 > 2020-05-07 13:24 | Report Abuse

I have informed the Administration

Posted by probability > 2020-05-07 13:24 | Report Abuse

Not sure what you mean. If you exclude the interest and make the FCF-E(equity) Icon had used and replace with FCF-F(firm), you can then work back on the required FCF-F to make the IRR 12%, you can then determine the FCF-F.

With the FCF-F, you have to then deduct the interest to obtain the Earnings.

This way, the earnings cannot exceed 160M. However its quite sensitive to the time frame/intervals between cash outflow and inflow used.


Posted by DK66 > May 7, 2020 1:04 PM | Report Abuse

If you could explain the results of Vinh Tan 1 under the assumption that the interest cost is excluded, then further discussion shall be meaningful.

Posted by DK66 > 2020-05-07 13:25 | Report Abuse

If they won't rectify the situation, I might have to say goodbye.

Posted by probability > 2020-05-07 13:26 | Report Abuse

@sarifah, what am i supposed to reply?

Posted by SarifahSelinder > 2020-05-07 13:29 | Report Abuse

probability

Klau what u said is true thn 160m is d minimum not d maximum being the 12% IRR return that EVN can guaranteed also equal capacity payment



probability Not sure what you mean. If you exclude the interest and make the FCF-E(equity) Icon had used and replace with FCF-F(firm), you can then work back on the required FCF-F to make the IRR 12%, you can then determine the FCF-F. 

With the FCF-F, you have to then deduct the interest to obtain the Earnings. 

This way, the earnings cannot exceed 160M. However its quite sensitive to the time frame/intervals between cash outflow and inflow used. 


Posted by DK66 > May 7, 2020 1:04 PM | Report Abuse 

If you could explain the results of Vinh Tan 1 under the assumption that the interest cost is excluded, then further discussion shall be meaningful.

07/05/2020 1:24 PM

Posted by SarifahSelinder > 2020-05-07 13:29 | Report Abuse

There is further return from sales of electricity

Posted by SarifahSelinder > 2020-05-07 13:30 | Report Abuse

Sales of electricity return is the one that can push IRR to mid teens

Posted by SarifahSelinder > 2020-05-07 13:32 | Report Abuse

EVN upfront cannot guaranteed return from sales of electricity

Posted by probability > 2020-05-07 13:35 | Report Abuse

Vinh Tan 1 earnings showing an IRR of 15%.

We are at the moment uncertain if JAKS could raise from an IRR of 12% estimated by the management to 15% like what DK66 is projecting.

Reason being Vinh Tan 1 had supercritical plant and operated at a load factor of 95.8% due to exceptional dry season in 2019.

As per OTB statement, though the management had said Hai Duong may have a better plant spec, till we know what is the 'spec' they have better, we do not know if it has any positive contribution to earnings unlike the spec on subcritical vs supercritical.



Posted by DK66 > May 7, 2020 1:04 PM | Report Abuse

If you could explain the results of Vinh Tan 1 under the assumption that the interest cost is excluded, then further discussion shall be meaningful.

Posted by DK66 > 2020-05-07 13:40 | Report Abuse

I m sure if you exclude the interest cost from Vinh Tan, the project IRR will be far far higher than 15%

Posted by probability > 2020-05-07 13:40 | Report Abuse

Not sure what you mean.

If you exclude the interest and make the FCF-E(equity) Icon had used and replace it with FCF-F(firm), you can then work back on the required FCF-F to make the IRR 12%, you can then determine the FCF-F.

With the FCF-F, you have to then deduct the interest, depreciation to obtain the Earnings.

This way, the Earnings cannot exceed 160M.

However its quite sensitive to the time frame/intervals between cash outflow and inflow used.

Infact Icon's IRR article is the best prove on what we can expect from JAKS, but his derivations appears to have a flaw.


Posted by DK66 > May 7, 2020 1:04 PM | Report Abuse

If you could explain the results of Vinh Tan 1 under the assumption that the interest cost is excluded, then further discussion shall be meaningful.

Posted by SarifahSelinder > 2020-05-07 13:40 | Report Abuse

Alamak jgn go back to efficiency

Upfront the 2 of u must clarity n agree on wat IRR of 12% guaranteed by EVN means

Posted by DK66 > 2020-05-07 13:41 | Report Abuse

would you like to do the calculation?

Posted by DK66 > 2020-05-07 13:42 | Report Abuse

I m now trying to get back my access to i3

Posted by probability > 2020-05-07 13:43 | Report Abuse

Please show this on a Table like what Icon did.

Infact the first ever article you should have made on JAKS is on the cash flow based IRR of 12%, since this is the only information we have from management on what to expect directly.

This is the single most important - convincing information.
.............................................


Posted by DK66 > May 7, 2020 1:40 PM | Report Abuse

I m sure if you exclude the interest cost from Vinh Tan, the project IRR will be far far higher than 15%

Posted by SarifahSelinder > 2020-05-07 13:47 | Report Abuse

Must clarity

Did EVN specify the 75:25 funding requirement bila it quoted the 12% IRR?

Posted by SarifahSelinder > 2020-05-07 13:50 | Report Abuse

Did EVN ever bother itself with funding structure of an IPP?

Posted by DK66 > 2020-05-07 13:53 | Report Abuse

probably, I will appreciate if you can do the job. I m busy.

Posted by DK66 > 2020-05-07 13:55 | Report Abuse

To me, nothing is more convincing than Vinh Tan 1's results.

Posted by DK66 > 2020-05-07 13:58 | Report Abuse

sarifah, Vietnam allows only projected IRR of 12% under certain assumed operating conditions to ensure IPP are not overpaid.

Posted by probability > 2020-05-07 13:59 | Report Abuse

DK66, take your time, i have done on my spreadsheet but it will not be like from a professional accountant.

I do not why you had hesitation on this right from beginning.



Posted by DK66 > May 7, 2020 1:53 PM | Report Abuse

probably, I will appreciate if you can do the job. I m busy.

Posted by Aseng > 2020-05-07 14:01 | Report Abuse

probability ,

i think DK66 had already answered you question

if there is no problem with my reading skill , what i can understand is that you are trying to tell us these points
1. FCF-E(equity), that is a calculation involves interest expenditure
2. FCF-F(firm), that exclude interest expenditure

I don't find there is any problem.

icon8888 calculation indicate an potential earning of 300M ,a FCF-E(equity)calculation
if FCF-F(firm) exclude interest , then the earning will be higher

DK66 peer comparative earning is just 200M

Am I right ?




Posted by probability > May 7, 2020 1:24 PM | Report Abuse

Not sure what you mean. If you exclude the interest and make the FCF-E(equity) Icon had used and replace with FCF-F(firm), you can then work back on the required FCF-F to make the IRR 12%, you can then determine the FCF-F.

With the FCF-F, you have to then deduct the interest to obtain the Earnings.

This way, the earnings cannot exceed 160M. However its quite sensitive to the time frame/intervals between cash outflow and inflow used.




Posted by DK66 > May 7, 2020 12:58 PM | Report Abuse

Don't you find Vinh Tan results more convincing ? If interest is excluded from Vinh Tan, what would the project IRR be ? More than 30%?

Posted by probability > 2020-05-07 14:04 | Report Abuse

@aseng, the earnings is worked back from FCF-F in order to match an IRR of 12%.

IRR 12% is fixed, Icon had used FCF-E to show that.

This will have a significantly reducing effect on Earnings estimated by Icon.

Posted by SarifahSelinder > 2020-05-07 14:06 | Report Abuse

DK66

Allowed doesn't mean it is a condition to have 75:25 bila EVN quoted its 12% IRR


DK66 sarifah, Vietnam allows only projected IRR of 12% under certain assumed operating conditions to ensure IPP are not overpaid.

07/05/2020 1:58 PM

Posted by DK66 > 2020-05-07 14:07 | Report Abuse

Probably, a word of selfishness, if you are so fond of the project IRR, shouldn't you do the calculation. I m sure you are more than capable. It doesn't need an accountant to do the job. Icon8888 is not an accountant. I apologise for my harsh words.

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

12% IRR appears the IRR given to ALL the IPP

Posted by DK66 > 2020-05-07 14:08 | Report Abuse

Probably, I hope you are not implying I m hiding something.

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

Not hiding jz different interpretation of the 12% IRR

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

GUARANTEED 12% IRR wat does tat mean?