Welcome the new management together with new set of shareholders! We look forward to a bright future. Cypark is in the right industry in the right time. In fact Cypark was an early player in the green energy space and benefit from it as there was less competition.
the thing is their Balance sheet is too weak and not so easy to move forward and growth. the loan ratio is too high and the operational cash flow coming from LSS2 Sik, Smart WTE are not sufficient to generate significant cash flow to fund any other future project. even with the COD of the current LSS2 + LSS3 in real soon, the operation cash flow will not be superb. Moving foward, cypark is hard to take up any large RE project (be it assets owner/EPCC), instead it can only continue to earn the low income from those project where he is assets owner, also O&M.
High gearing is a common feature of asset owning company like Cypark. It is ok as the the cash flows are guaranteed via PPA ( Power Purchase Agreements ) with the off takers. A power plant project with PPA can have gearing of 80/20 as the sale from the plant output is guaranteed during the entire duration of PPA. Moreover the power plant project would only proceed if it will provide sufficient returns for both the lenders and owner.
By 2024, US tariffs on chinese solar cells, whether or not assembled into modules, will increase from 25% to 50%. China controls over 80% to 90% of certain segments of the global solar supply chain and provides solar components and panels at low prices, affecting investments in solar manufacturing outside China. As a mature solar manufacturing base, Malaysia may benefit as manufacturers seek supply chain alternatives to China.
The balance sheet shows contract assets and receivables totaling 0.87 billion (777+101). The total debt stands at 1.4 billion (170+1301)
The bulk of the contract asset is tied to the Renewable Energy project. Currently, there’s only one LSS project remaining, which is nearing completion. It’s now the responsibility of the new management to collect the money from its client. The hope is to recover at least 70% of the 0.87 billion, which equates to about 600 million. This amount can be used to repay the loan, potentially reducing the total debt to approximately 0.8 billion in near future. This could result in a gross gearing ratio of around 0.47.
In the short term, the goal is to secure as many EPCC projects as possible to boost cash flow. Later, the focus can shift back to solar farm projects. Funding shouldn’t be a major concern as Cypark has Jakel’s support. Additionally, new projects can leverage a joint venture business model for bidding and building future solar farms.
I didn’t take into account the future earnings when the current LSS farm (potential brownfield expansion) and WTE reach the maximum capacity. This will undoubtedly enhance the overall net profit. In conclusion, provided that the new management team is committed and diligent, I’m fairly confident that Cypark will evolve into a more successful company
Definition (according to AR2023): A contract asset is recognised in respect of the right to consideration for work performed which has not been billed at the reporting date. Contract assets are reclassified to trade receivables at the point at which it is billed to the customers and none of the amounts are past due at the reporting date.
becos cypark is majority owned by jakel, whom as I understand it is basically the major funder and land provider for that proposed new jv datacentre project
Another RE rumors that KAB is diving into solar power, floating solar, battery storage, waste heat recovery, and waste-to-energy projects, and another big expansion in Kedah! Definitely worth checking them out..
The SMART WTE COD and started its sales to TNB on 14 December 2022.
As of the end of April 2024, the WTE plant has been commissioning for nearly a year and a half..... 1.5 years liao hellooooo.....how can they continue to incur losses??? what are the people doing? rugi 61million... really speechless...
Disappointing qtr results..... 4th qtr 2024 resulted in loss after tax of RM58m full financial year loss of RM84m, cashflow is also negative at -RM37m from operating activities the RM57m loss mainly comes from RM46 million derecognition of the deferred tax assets the loss is attributed to the reduced electricity sale by the Waste Management & Waste-To-Energy division, following a temporary unscheduled downtime for necessary rectification efforts...
The demand for green or renewable energy by data centres would likely exceed what currently available. Cypark was early in developing and owning solar farms and therefore obtained higher profit margins compared to the new solar projects.
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....
8u29song
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Posted by 8u29song > 2 months ago | Report Abuse
green energy is the trend.....