JAKS (4723) JAKS RESOURCES BERHAD - Annual net profit of Hai Duong power plant in 2021 is RM 248 million

JAKS (4723) JAKS RESOURCES BERHAD - Annual net profit of Hai Duong power plant in 2021 is RM 248 million

Dear valued members,

 

Background

1. The consumers in Vietnam are paying USD 8 cents for 1 kwh of electricity from Vietnam government.
2. I assume profit margin for Hai Duong power plant is around 30%.
3. Hence I assume net profit margin of USD 2.4 cents for 1 kwh of electricity sells to Vietnam government.

My calculation

I wish to show you the below calculation how I can get RM 248 million.

 

The cumulative power sales of Vinh Tan 1 were 8.194 billion kwh per year based on annual 7,238 utilization hours.

Since Hai Duong power plant is the same spec as Vinh Tan 1, this power plant is built by CPECC and Vinh Tan 1 is built by CEEC. CEEC is a subsidiary of CPECC who is also Jaks's partner in JHDP.
 

I will assume the same cumulative power sales were 8.194 billion kwh per year.

Profit margin is USD 0.024 (2.4 USD cents).
1 USD =  RM 4.20.
Jaks owns 30% stake of Hai Duong power plant.

Calculation
= 8,194 * 0.024 * 4.20 * 30% = RM 248 million.
This profit is tax free.
EPS = 248/651 = RM 0.38
 

The present share price of Jaks is 1.28.

If PER = 10, the target price of Jaks is RM 3.80 in 2021, the potential gain is 197%.
If PER = 15, the target price of Jaks is RM 5.70 in 2021, the potential gain is 345%.

FA report   

1. I assume all Malaysian operations to be zero value. Evolve Concept Mall is valued at RM300 million, I believe this amount of money is more than enough to cover all losses in Malaysian operations.
2. FY 2019, the profit after tax is 109 million. 
3. FY 2020, I projected the profit after tax of 150 million. 60 million is the construction profit from power plant and 90 million on the sale of electricity in 2020.
4. FY 2021, I projected the profit after tax of 248 million from the sale of electricity only.
5. The target price below is based on PER=10.

Year	Price	PAT	EPS	PER	Target price	Gain %
2019	1.28	109	0.17	7.64	1.67	30.81%
2020	1.28	150	0.23	5.56	2.30	80.01%
2021	1.28	248	0.38	3.36	3.81	197.62%

 

My 2 cents comments

1. I feel very confident that Jaks will perform very well in 2020/1.
2. I recommend Jaks is because of its Hai Duong power plant in Vietnam.
3. I take all Malaysian operations of Jaks to be zero value.
4. I am very confident that the net profit of its power plant can make RM 248 million in 2021.
5. It is so difficult to find a good stock like Jaks in 2020.

Final decision to buy is always yours.

 

Thank you.

Ooi

寧可天下人負我, 休教我負天下人

 

Disclaimer :

Please be informed that the aforesaid stocks are solely for the purpose of education only ; it is neither a trading advice nor an invitation to trade. For trading advice, please speak to your remisier or dealer representative.

Final decision to buy is always yours.
https://klse.i3investor.com/blogs/OoiTeikBee/2020-03-04-story-h1484715821-Jaks_Annual_net_profit_of_Hai_Duong_power_plant_in_2021_is_RM_248_milli.jsp