stockmanmy

April Fool day or what?

2017-04-06 08:38

CharlesT

When the IPP not yet completed in 2014 Koon promoted kuat kuat at RM2.60+ for TP RM3+...

Now IPP is finally jalan do u think Koon will buy now at Rm1.20 (of course quietly first)?

2017-04-06 08:41

CharlesT

Mudajaya’s Wild Card - Koon Yew Yin
Author: Koon Yew Yin | Publish date: Fri, 28 Feb 2014, 10:56 PM

My wife and one of my closest friends told me that it is unethical to publish articles regarding the shares that I own because some readers who do not know me well would doubt my good intention. However, at my age and my financial standing I am not afraid to post this article as long as my intention is noble and altruistic. I want to teach you how to fish!

Since I wrote about Jaya Tiasa, many readers wanted to know about my other holdings. Mudajaya is my second largest holding. I also have some Xingquan, Success Transformer, Kulim, MFCB and smaller holdings of a few other counters.

As you know, many financial institutions are covering this stock and despite their frequent recommendations Mudajaya’s share price has been trading around this current level of Rm 2.70 in the last 3 or 4 years. Why should it be selling cheaper than its peers in terms of P/E ratio?

As you can see from the price chart, average price for the last few years is about Rm 2.70 and the downside risk is very small. For the share price to break out of this price range it needs a powerful catalyst which should be the announcement of its profit from its 26% share of the Independent Power Producer (IPP) concession in India. Let me give you a brief description of this project.

I was one of the original founders of Mudajaya and during my tenure, I constructed the 1st phase of the Tungku Jaffa power Station in Port Dickson about 40 years ago. Since then the company has completed 19 power plants as a construction contractor. The company specializes in power plant construction.

But in India, Mudajaya has taken a different role. Mudajaya holds 26% of a consortium to construct, own and operate 4 units of 360 Mega Watts coal fired power plant to generate electricity for sale to the Indian Government.

The total power is 4 units X 360 = 1440 mega watt. One mega watt can light up about 1,000 homes.

The estimated construction cost is about USD 4X360 MWX 1.3 million = USD 1.87 billion

The annual coal consumption is about 4,500 ton X 4X360 = 6,480,000 ton per year.

Assuming the coal price is USD 50 per ton, the annual cost of coal used = USD 324 million.

All these figures are mind boggling, hard to imagine any company has the financial ability to undertake this large concession for 25 years.

In India, a consortium of financial institutions finance the construction cost basing on the Power Purchase Agreement signed by the Indian Government. The banks must make sure that the power purchase agreement (the selling price of electricity) is profitable to Mudajaya and its partners otherwise the bank will not get back their money. The power purchase agreement is for 25 years and the power tariff will be adjusted to cover cost of coal, inflation, foreign exchange etc.

The first unit of 360 mw will be operational by end of March and the second unit will be operational by end of the 2nd quarter. By the end of the year all the 4 units will be in full operation.

The completion date has been postponed a few times until investors are fed up. As a result the share price remains depressed for so long. I believe the announcement of the additional profit spread over 25 years will be the catalyst to propel the price upward.

Today while I was writing this article, a big fund was buying aggressively to push the price up by 12 sens to close at Rm 2.80. The total volume traded was 2.972 million shares. It looks like the long delayed announcement of the additional profit from the Indian IPP concession will be out soon.

I am obliged to tell you that Mudajaya is my 2nd largest holding and I am not asking you to buy it. But if you do, I am not responsible for your losses.

2017-04-06 08:43

CharlesT

Mudajaya: Indian Power Project Completion - Koon Yew Yin
Author: Koon Yew Yin | Publish date: Sat, 5 Jul 2014, 12:14 PM

About 7 years ago, CIMB research had a buy recommendation for Mudajaya because of the Indian power project as shown in the report below. Investors have waited for 7 years and all of them are tired and disappointed in waiting for the completion of the Indian power project. Finally the 1st unit of 360 mw will start firing in a few weeks and most likely all the 4 units of 360 mw will be operational by year end. How will this benefit investors?

What is this Indian power project?

About 40 years ago, when I was the CEO, Mudajaya built the 1st power plant called Tungku Jaffaar Poer Station, Port Dickson, Negri Sembilan, Malaysia. Subsequently Mudajaya completed 18 more power plants in Malaysia as a construction contractor. Mudajaya is a specialist in power plant construction.

But in India, Mudajaya holds 26% in an independent power producer (IPP) joint venture with an Indian partner to undertake the construction of 4 units of 360 mw coal power plant and the sale of electricity to the Indian Government.

Perhaps if I tell you some brief details of the Indian project, investors can imagine the difficulty of completing such a large project and forgive Mudajaya for the long delay.

The size: 4 units of 360 mw, totaling 1440 mw.

Cost: The total construction cost is about 1440 mw X US $ 1.5 million X 3.20 = RM 6,912 million.

Coal consumption: 1440 mw X 4,500 ton = 6,480,000 ton per year

Coal consumption cost at US $ 30 per ton = 6,480,000 X 30 X Rm 3.20 = Rm 622 million per year.

Power line construction cost: Rm 2 million per kilometer, total length required ??

Mudajaya holds 26% in this joint venture and its estimated profit is about Rm 70 million per year for 25 years which all investors have been waiting for.

The price chart shows Mudajaya share price has been depressed for many years. I believe it is due for re rating when the company makes the announcement of the completion of the Indian power project.

Mudajaya is one of my major investment holdings. I am not asking you to buy it but if you buy, you are doing at your own risk.

2017-04-06 08:45

r°Moi

But... if not mistaken.. Mr K did not make the call to sell.. himself

2017-04-06 08:45

CharlesT

The question is do u want to buy quietly now with somebody or buy later at much higher price when somenbody posted his recommendation buy call on this co in i3 few months later?

I am obliged to tell you that I bought 10K Mudajaya at Rm1.10 2 days ago and I am not asking you to buy it. But if you do, I am not responsible for your losses.

2017-04-06 08:47

r°Moi

Point is.... 2.00+ still in order... just a bit late

2017-04-06 08:50

CharlesT

PLPman n Kukuman do u guys wanna buy now at RM1.20+ or wait for insider tips from oldman to buy at RM1.70 later?

Yr call.

2017-04-06 08:53

CharlesT

2. Will the famous investor Mr. Koon Yew Yin purchase back this company shares once all four power plants commence sales? It would be a boost to the company share price if this indeed, happened. (Note: this is just a question for thought, not a definite statement

What do u think?

Koon was so happy to buy at RM2.60+ few years ago till he became the second biggest shareholder while none of the IPP commmerce sales...

2017-04-06 08:59

CharlesT

Just like now he is so happy to sapu JAKS at RM1.50/1.60/1.70 till he becomes the biggest shareholder while there is no IPP yet in vietnam

If u were him what would u do?

2017-04-06 09:02

CharlesT

Do u wanna pay high premium now for something which u can only see in 3-5 years time, or do u wanna pay discounted price for something which finally moves after years of waiting?

This simple question will determine whether u can be Superinvestor or not in future

2017-04-06 09:05

johnny cash

Better buy now more, when it is still cheap

2017-04-06 22:20

PlsGiveBonus

This must billion dollar fund manager

2017-04-06 22:27

johnny cash

Is this just a hoax???????????¿????

2017-04-07 08:05

nooobieee

so hai punya jho low wanna be
use other more famous one mah, like Aberdeen, Blackrock etc
this name never heard before pun

2017-04-07 11:56

Lee Richard

Mudajaya Group Berhad - New Nordic fund as shareholders putting the target price as Rm2.43 pls check it out?

2017-05-10 10:32