0 We maintain our BUY call, forecasts and fair value of RM2.47/share based on 18x revised FY23F EPS. We value KPower at a discount to the average forward 20x PE of leading renewable energy players globally to reflect: (1) KPower being a relatively new player in this space; and (2) its relatively small market value. No ESG-related adjustments to our fair value based on a 3-star rating as appraised by us (Exhibit 2). KPower has proposed a private placement of new shares of approximately 10.8% of its outstanding shares or 48.8mil shares at an indicative issue price of RM2.05/share. The RM100mil proceeds from this exercise are mainly earmarked for working capital (i.e. 50MW LSS4 power plant, mini hydropower plants and other upcoming projects). Based on our estimates, the gross proceeds of RM100.0mil will increase KPower’s net cash position to RM163.5mil (or 25 sen/share) from RM63.5mil (or 10.5 sen/share) as at 31 March 2021. Meanwhile, based on our calculation, the new shares will dilute its FY23F core EPS by 6% as a 10.8% expansion in the share base more than offset a 2% earnings enhancement arising from interest income (based on an interest rate assumption of 2%). Assuming the deal is to be completed, our fair value shall fall to RM2.33 based on the same valuation basis. We are neutral on this development. YTD for FY21F (June), KPower has secured jobs worth a total of RM1.2bil, which is still within our annual job wins assumption of RM1.4bil for FY21-23F (vs. KPower’s guidance of RM2.0bil for FY21F). The group’s outstanding construction order book stands at about RM2.0bil. We continue to like KPower for: (1) the bright prospects of renewable energy, underpinned by the global trends towards clean and sustainable energy and carbon neutrality to combat climate change; and (2) its strong earnings visibility and growth potential underpinned by its RM2.0bil order backlog on green utility projects, coupled with a massive tender book of RM3.4bil. At about 12x fully-diluted FY23F earnings, we believe that this homegrown renewable energy player has a compelling investment case given its involvement in the green sector where the growth trajectory is just beginning. Source: AmInvest Research - 25 May 2021
Don't know why people are discounting K-Power. Most of Kpower's projects are from TNB or Msia govt or foreign govt. There is no way they can fake the projects.
This counter will limit up when Serba stabilizes its share price.
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....
sayangawak
540 posts
Posted by sayangawak > 2021-06-25 09:10 | Report Abuse
Guys ur money guys!