Dear Sslee,

Thank you for your information

I assumed 133m (same as 2016) interest income for 2017 because it was mentioned in 2017 AR that

"Interest income decreased $1 million in 2017 from 2016 with no material drivers."

It was mentioned that the adoption of new accounting standard in 2018 has resulted in increase in interest income by 58m. Therefore, 133 + 58 = $191m.

Working backward, interest income for 2017 should be 186-58 = $128m

The information in note 16 should be more accurate, I shall amend accordingly

Loan receivable as at 1/1/2018 was 1,490 and 1,423 at 31/12/2018

Thank you.
-------------------------------------

Sslee Dear DK66,
I think some error on your interest income calculation for year 2017 and 2018.

Interest income (2018)
Note 16 - Segment and Geographic Information
Interest income year 2018, 2017, 2016, 2015, 2014
Eurasia SBU ($Million)186 130 139 115 2

May I ask how you get the loan receivable was reduced by USD 67 million.

Thank you

A quiet forum ? is this a good sign ?

Expected earnings at 90 untilisation,

Earnings= US$346m – US$67m – US$1,287m x 6% (Est)

= US$202m

Assuming O&M at 1% of project cost = US$19m
Currently Zero Tax

PAT = US$183m

Anyway, this is just a rough estimate.

Sarifah,

The plant began operation in April 2015. So, it is less than 25 years now

Loan receivable is expected future payment from EVN not bank borrowing

The interest expenses is based on expected balance of actual borrowing after 3 years of repayment
1,950m x 75% x 22/25 = 1,287m

https://klse.i3investor.com/blogs/Jaks%20resources/204451.jsp

By Kenanga research
--------------------------------
newbie8080 I thought someone mentioned that the Jaks management is looking at COD for 1st unit by end 2019.

I m currently studying the Mong Duong 2 coal power plant in detail. Preliminary observations confirm my understanding of the potential of the power plants. All factors including the act of god have been taken into consideration when negotiating the PPA in particular the capacity payment.

HFO is normally used during start-up of coal power plant to pre-heat the boiler to certain temperature before coal is fired into the boiler. Once optimal temperature is reached for coal firing, HFO is suspended.

Demand of electical energy varies with time and season. Generally speaking, it is at certain constant level throughout a day(called base load) and peaks in the morning and evening hours. Base load power stations comprise of fossil fuel fired boilers and steam turbines. Generation from these units can not be varied quickly. Start up time is in hours. Steam turbines at certain lower loads, generally below technical minimum load (40% of maximum rating) operate at very low efficiency. Also coal fired boilers can not be operated below certain load without oil support. Due to these constraints these power plants are operated at constant loads between 60% to 100% of the maximum rating and cater to base load requirements.

----------------------------------------------------------------
SarifahSelinder DK66

Tumpang tanya

Why coal power plant has oil fired power plant feature in particular knp boleh guna HFO juga?
27/04/2019 9:02 AM

Dear Sslee,

Please consider the following;

https://english.vietnamnet.vn/fms/business/190623/rising-global-coal-prices-a-threat-to-budget.html

“The doubling of the coal price from $50 in January 2016 to almost $100 today is largely as a result of a Chinese policy aimed at an orderly coal market transition by maintaining a degree of profitability for domestic Chinese coal miners, while the central government forges ahead with an accelerating transition to clean energy,” it said. “China is set to install 50 gigawatts of solar in 2017 alone; a global record for a single country in a single year.”

Assuming straight line appreciation in coal price from US$50 in Jan 2016 to US$100 in Dec 2017. Hence, average coal prices will be US$62.5 and US$87.5 for 2016 and 2017 respectively.

In 2016,

Net energy output = 5,695,113 MW
Coal consumed = 2,924,237 tons
Total Coal Cost = 2,924,237 tons x 62.50 = US$182,764,813
Revenue = US$340,000,00
Revenue excluding Coal cost = US$340,000,00 - US$182,764,813 = US$157,235,188

In 2017,

Net energy output = 3,398,354 MW (Dropped 40% from 2016)
Coal consumed = 1,754,852 tons
Total Coal Cost = 1,754,852 tons x 87.50 = US$153,549,550
Revenue = US$278,000,000
Revenue excluding Coal cost = US$278,000,000 - US$153,549,550 = US$124,450,450
Drop in Revenue excluding Coal cost = US$32,784,738 (Dropped 21% from 2016)

40% drop in energy output -> 21% drop in revenue excluding coal cost.

This shows that a 40% drop in capacity utilisation does not cause an equivalent 40% drop in revenue even taking into account the significant increase in coal prices.

This is due to the cushion provided by the capacity charges which does not depend on the energy output or plant utilisation rate.

--------------------------------------------------------------------
"The only negative is profit is base on net power output. If merit is given to Hydro power and coal power plant capacity limited to 50% then for that year your profit also will be only 50% instead as projected by Kenanga USD120 million net of tax per year for 25 year.

Most likely this is due to power payment include coal cost pass through and the coal cost pass through year 2017 is very much higher than 2016. "

Yes, I think so

-----------------------
SarifahSelinder Is it the same for Jaks IPP?

However, when it is operating at less than 60% capacity, it has to use HFO as a mix fuel in production.
25/04/2019 4:41 PM

Sarifah,

I must correct your understanding of Mong Duong 2.

It is primarily using anthracite coal as the basic fuel in power generation. However, when it is operating at less than 60% capacity, it has to use HFO as a mix fuel in production.

Dear Sslee,

Thank you for your explanation.

Please allow me to take time to do some reasonableness tests.


-----------------------------
Sslee Dear DK66,
Your question, “Given the above information provided by Mr Sslee,
The net energy out reduced by 40% in 2017 compared to 2016, it revenue only reduced by 18%. How valid is the following statement?”

Most likely this is due to power payment include coal cost pass through and the coal cost pass through year 2017 is very much higher than 2016.
https://e.vnexpress.net/news/business/global-coal-price-hike-could-cos...
November 16, 2017 | 04:10 pm GMT+7
The current market price of thermal coal has risen to $100 per ton, twice the amount recorded earlier last year

Dear Sslee,

It is good that you have explained why you assumed capacity payment = interest income. I will not argue any further than i already have.

Below is extracted from my article "Understanding Jaks Hai Duong thermal power plant in Vietnam"
https://klse.i3investor.com/blogs/Jaks%20resources/189891.jsp

"JV agreement (JV)

The JV agreement provided that Jaks resources (JRB) shall execute subcontract agreement with CEEC in relation to its scope of work under the EPC Contract 2."

The entire EPC was subcontracted to CEEC who has to bear cost overrun, if any.

It was mentioned that the proceeds from warrant issue is to "facilitate and expedite" its vietnam construction. I do not know what it meant exactly. It could have just say " for the purpose of its vietnam construction". Anyway, I maintain my stance that vietnam construction does not require any further funding from Jaks. Readers can take their own views.

Thank you,

PS: Please do not associate me with anyone. I have my own thoughts.


-----------------------------------------
Sslee Dear DK66,
While reading AES balance sheet, I learned for BOT's assets is not classified as Property, Plant and Equipment but as service concession assets or Loan receivable. In this case PPE depreciated is not needed but this service concession or loan receivable with received a payment to amortized or pare down the service concession or loan receivable to zero at the end of BOT.
That is what I understand, thus I assume capacity payment or interest income refer to the same thing. Anyhow I may be wrong and I leave it to people in the know to clarify.

As of your questions, “If you think Jaks is going to run into cash flow problems, Just make a clear statement. Again, you didn't.” My answer, Isn’t the repeated PP, Warrant issues a capital rising to settle the cash flow problems? And what worries me is the current PP
http://www.bursamalaysia.com/market/listed-companies/company-announcem...
Under the Proposed Private Placement, the proceeds to be raised of up to RM39.43 million will be used for the payment of additional equipment required, as well as the additional costs that have arisen from the progress of the Vietnam Power Plant Project, in particular, the contractors’ progress claims, fabrication of equipment and services rendered in relation to the construction and engineering works for the jetty and administration building.
Is this means EPC Vietnam Power plant Jobs also facing cash flow problem? Or cost overrun?

DK66 you have my respect, my only concern on you are not to be overconfident if possible not to put all eggs in one basket. If want to invest for long term learn from Philip and stay far away from quack accountant.

Thank you
25/04/2019 8:48 AM

Please don't say that.

I didn't address to him because his statement was directed to you

------------------------
SarifahSelinder Adoi sslee

DK66 x lagi on talking term with u

Sarifah,

"Despite being on reserve shutdown for much of 2017 (at the request of Electricity of Vietnam, given that the hydropower plants were running at high capacity due to unusually heavier rainfall), Mong Duong II was always ready when called to operate to meet our customer expectations.
2016 Gross Generation 6,394,476 MWh. Net Energy output: 5,695,113 MWh.
2017 Gross Generation 3,780,403 MWh. Net Energy output: 3,398,354 MWh.

Year Ended December 31, (Revenue) 2018 2017 2016
Vietnam (2) (Million) 245 278 340 "

Given the above information provided by Mr Sslee,

The net energy out reduced by 40% in 2017 compared to 2016, it revenue only reduced by 18%. How valid is the following statement ?

"The only negative is profit is base on net power output. If merit is given to Hydro power and coal power plant capacity limited to 50% then for that year your profit also will be only 50% instead as projected by Kenanga USD120 million net of tax per year for 25 year."

Dear Sslee,

"Interest income increased $159 million, or 44%, to $524 million in 2015 from $365 million in 2014. The increase was primarily due to interest income of $114 million recognized in 2015 on the financing element of the service concession arrangement at Muong Duong, as well as an increase of $54 million at Eletropaulo and Sul resulting from higher interest rates and an increase in regulatory assets." AR page 82

It was clearly mentioned interest income of $114 million recognized on the "financing element", hence, only a portion of the revenue was recognised as interest income.

We do not know what we don't know and we should not assume what we don't know.

What was your purpose of raising all the questions ? Are you saying the interest income = capacity payment ?

For your information, auditors do not run a company, they only form an opinion on the "true and fairness" of a company's accounts.

You were effectively asking me how to run Jaks. I do not know how to run its businesses and neither do i know its cash flows. I didn't not say i know everything but at least i didn't say things that i don't know.

If you think Jaks is going to run into cash flow problems, Just make a clear statement. Again, you didn't.

Thank You

---------------------------------------------------
Sslee Dear DK66,
Refer AES Balance Sheet: 2018
Service concession assets, net of accumulated amortization of $0 and $206, respectively $0 (2018) $1,360 (2017)
This was transfer as Loan receivable in 2018
Loan receivable $ 1,423 (2018) $0 (2017)
So what different between service concession assets” (2017), classified as “Loan receivable” (2018)?
What different between capacity payment and interest income?
In AES case what is AES Muong Duong revenue and Interest income refer to?
Are you saying AES Muong Duong should receive revenue + interest income + capacity payment?

Sorry if you feel I try to discredit you as I thought as former auditor you are able to read the Balance sheet and give your truthful view on my question “What it takes to clear the playable against receivable. How to fund remaining USD 92 million to be injected into JAKS equity portion of Vietnam JV and when company debt can be reduces and generate enough positive FCF to consider paying dividend. Then hopefully by year 20XX ALP is kind enough to share the wealth with you and give you a dividend”

Thanks,

My past experience gave me some advantages in reading annual reports. I know why an account is prepared in certain ways. I know how they dress up an account. However, knowing too much until losing faith in AR. I often found crucial information hidden within the account.

There is certainly a lot of improvement can be made on the disclosure front. However, in malaysia, most companies prefer to disclose only the minimal.

----------------------------------
Icon8888 DK66 Auditor.... no wonder so pro..

Respect
24/04/2019 8:52 PM

Dear Sslee,

I m very disappointed. You did not even dare to admit you gave a wrong information on the capacity payment for 2015 and 2016 which are in fact interest income. You should have at least explained. I hope you didn't do it on purpose.

Capacity payment
2015: USD 114 million
2016: USD 133 million

You failed to prove beyond doubt that the vietnam ipp is not great. You even questioned Kenanga's profit forecast.

You wanted everyone to take your advice but you refused to take a stance.

You tried to tie me with the "previous promoter who turned" and now stamped me "crime in partner". Are you trying to discredit me so that no one will believe me ?

Your stance is really confusing, on one hand you think Jaks will face liquidity problems and management issues, on the other hand, you may buy later with informed decision.

Are you assuming everyone is making uninformed decision now ? I have written many articles to prove my investment rationale in detail.

Mr Sslee, I welcome your effort to provide counter arguments but trying to discredit others is certainly not reflecting well on yourself. I will never do that.

Despite all your negativity, you said you may buy Jaks after 2021 ??

Eventually, I may be right or wrong on whether Jaks is an opportunity of lifetime. I made clear my investment ideology. I didn't encourage anyone to buy until 3 months ago. I will not encourage anyone to buy above RM2.50 which is my current target price. Certainly, I will not encourage "sailang".

In fact, my stance is either you BUY NOW or you DON'T BUY at all.

Maybe you should make your stance clear too.

Thank You

----------------------------------------------------------

Sslee Dear DK66,
You are an accountant and former auditor. You should be able to read the balance sheet and know what it takes to clear the playable against receivable. How to fund remaining USD 92 million to be injected into JAKS equity portion of Vietnam JV and when company debt can be reduces and generate enough positive FCF to consider paying dividend. Then hopefully by year 20XX ALP is kind enough to share the wealth with you and give you a dividend

By the way, you are most welcome to be a long term shareholder of JAKS and ready to fight for minority shareholder right at the AGM. Your perception of JAKS as a one in a life time opportunity is a bit unrealistic and over optimistic. My only wish is do not let your-self to be crime in partner with Quack accountant that had promoted JAKS with “Sailang” and Margin finance for year and lead many newbie to chase high to RM 1.80 and loss a fortune but he himself profited again and again. He still has the gut to show off himself as smart investor and scold those who lose money in JAKS and SENDAI as stupid idiot.

I will only look at JAKS after 2021 and base on each quarter financial report to make an informed investment decision. After all as long term investment a CAGR of 10-20% will be great for me. I do not need to earn 100% in 6 months time and then loss 150% in the next 3 months. As a short term trader, I have many better running horses following CharlesT aka KoonBee stocks selection.

Coal cost is pass thru in the PPA. Its effect on the profit is minimal. However, lower cost of coal will make coal power more competitive.

--------------------------------
steady31 going to be super profit for Jaks power plant because coal is now usd 87 /ton vs usd 110 /ton in projection
24/04/2019 2:46 PM

Dear Sslee,

Are you sure the these income recognised in 2015 and 2016 are capacity payments not interest income ? Please clarify

---------------------------
Capacity payment
2015: USD 114 million
2016: USD 133 million

I have no frust with Sslee. On the contrary, I appreciate his sharing.

However, I think it would be helpful to most readers here if he can give an overall opinion.

As he has been negative on Jaks, most will take it that it is a SELL call by him. He should clarify his position.

------------------------------------
i3Value DK, i sense your frust deal with Sslee. Yes, lets force him make a stand. Else he type this type that with no objective and direction in his mind.

"Capacity Payments and Contract Sales — Most of our contract sales include a capacity payment that covers projected fixed costs of the plant, including fixed O&M expenses and a return on capital invested. In addition, most of our contracts require that the majority of the capacity payment be denominated in the currency matching our fixed costs, including debt and return on capital invested. Although our project debt may consist of both fixed and floating rate debt, we typically hedge a significant portion of our exposure to variable interest rates. For foreign exchange, we generally structure the revenue of the business to match the currency of the debt and fixed costs. Some of our contracted businesses also receive a regulated marketbased capacity payment, which is discussed in more detail in the Capacity Payments and Short-Term Sales section below.

Thus, these contracts, or other related commercial arrangements, significantly mitigate our exposure to changes in power and fuel prices, currency fluctuations and changes in interest rates. In addition, these contracts generally provide for a recovery of our fixed operating expenses and a return on our investment, as long as we operate the plant to the reliability and efficiency standards required in the contract.

Capacity Payments and Short-Term Sales — Many of the markets in which we operate include regulated capacity markets. These capacity markets are intended to provide additional revenue based upon availability without reliance on the energy margin from the merit order dispatch. Capacity markets are typically priced based on the cost of a new entrant and the system capacity relative to the desired level of reserve margin (generation available in excess of peak demand). Our generating facilities selling in the short-term markets typically receive capacity payments based on their availability in the market. Our most significant capacity revenues are earned by our generation capacity in Ohio and Northern Ireland." - Mong Duong AR


"these contracts generally provide for a recovery of our fixed operating expenses and a return on our investment" - > Capacity Payment alone provides a recovery of return on investment

Clearly supporting my notion that capacity charge guarantees profit.

Dear Sslee,

I m sure readers here would like an overall opinion from you. Buy, neutral or sell at RM0.80 ?

Thanks

edkfc,

given your assumption of even net cash flows for all periods, what have you derived ?

n behalf of the Board, UOBKH wishes to announce that Bursa Securities has, vide its letter dated 22 April 2019, resolved to approve the listing of and quotation for up to 68,708,156 new ordinary shares to be issued pursuant to the Proposed Private Placement on the Main Market of Bursa Securities

Profit from Vietnam EPC in Q1 2019

Year revenue Profit Profit Margin%
2016 150.10m 36.00m 23.98
2017 251.20m 55.10m 21.93
2018 324.70m 84.00m 25.87
Total 726.00m 175.10m 24.12

If the unbilled sales = 1.02b as of now (from Kenanga)
Note that this is only 46% completion
The proposal of pp stated that the overall completion is 56% at LPD

Total billings = 1.89b - 1.02b = 870m

Hence billings in Q1 2019 = 870m - 726m = 144m

Profit from Vietnam EPC in Q1 2019 = 144m x 0.2412 (ave margin) = 35m

So are the auditors. That I m sure. :)

----------------------------------
qqq3 all IB analyst are trained for CYA....cover your ass............

Kenanga said 46% done as at Dec 2018. Based on 1.02b unbilled as of now, still 46% done as of now ???

100% - 54%(unbilled) = 46%(work done)

------------------------------------------
SarifahSelinder Ok

Anyway analysts write like shit not clear at all

Yes, my oversight. That is why I already deleted

--------------------------------
SarifahSelinder DK66

% complete todate should not it be....

(Billed todate + Done but Unbilled todate) / 1.89b
22/04/2019 9:49 AM

CFO sold his share just 3 weeks prior to the announcement of pp.

What if the private placement is done at below RM0.735 ? Any legal implications ?

Like insider trading ?

Would any shareholder likely to file complaint if the CFO seems to have benefited from his early knowledge of the pp ?

CFO sold his share at RM0.735, 3 weeks prior to the announcement of pp.

What if the private placement is done at below RM0.735 ? Any legal implications ?

----------------------------------
qqq3 think about it..........

CFO sold $ 500k worth of LTIP at 80
company announces pp
1 day after announcement applies for listing of new shares.....

they have it all planned out already...
all the pp shares fully taken up by themselves.

Management is bullish and wanted more shares for themselves.....

I not guarantee u but I also not BS u...........
21/04/2019 10:56 PM

Just to share with those who are interested in my stock market ideology to know why I have chosen to bet on Jaks.

Let me share a little of my past working experience. When I was an auditor with the largest accounting firm in the world during my time, I was exposed to a wide variety of listed companies.

From my experience, I can tell you that don't waste too much time analysing the financial statements. Just get an understanding of the financial positions of the company will do. Don't worry too much about the liquidity of the company. Auditors and accountants seldom spotted the problems before the bankers. It is their expertise and interest to make sure the companies are able to pay their debts.

As an auditor of some very big listed companies, I learned to smell problems. However, as most CFO of listed companies came from an auditor background, it is not easy to spot their cover-ups.

Even the Partners and senior managers of auditing firms concurred that understanding the businesses of your clients is the single most effectively means to spot abnormally. A cables salesman would make the best auditor of a cable company.

After i quit as an auditor (working hours too long), my brother brought me into the business world. I learned to spot opportunities and take risks. We were quite successful by our own measurement.

I m not exactly a typical type of investor. To me, there are listed companies which are doing exactly what i was doing, seizing wonderful opportunities, but in a much larger scale. I looked for companies which seized life changing opportunities with high success odds. I spent days and nights understanding its business opportunities. Once satisfied, I will ride with the company through ups and downs until the opportunity materialises.

Investing in Jaks is all about its vietnam IPP. Don't be too concerned with its local businesses as a property developer. Don't worry too much about frequent fund raising exercises. it is a vote of confidence. Trust me, you should be more worried if it can't raise any money.

If you are a businessman, you will appreciate the opportunity Jaks presents. But if you are an accountant or a prudent investor, you will only see the current mess Jaks is in.

Thanks for reading.

Used to be a senior auditor with KPMG, later became a businessman.

Dear Sslee,

The main aim of the capacity payment is to provide a predetermined return on capital invested by IPP.

You are right, AES doesn't provide a complete account for mong duong 2.

As far as I know, the PPA tariff payment will be taken up in a very complex accounting treatment. It is partially recognised as interest income. I will not enter into detail discussion of accounting treatment as most will not understand. For those who are interested, you may look up for accounting treatment for assets under BOT.

You are right in saying that while those not happy with the continuous fund raising by Jaks, the immediate concern is whether the current PP will be successful. A successful PP will be a vote of confidence.

--------------------------------------------

Sslee Dear DK66,
I can found only below bits and pieces of information on AES financial report

2015
Service concession assets, net of accumulated amortization of $34 1,543 (2015)
The increase was primarily due to interest income of $114 million recognized in 2015 on the financing element of the service concession arrangement at Muong Duong,
2016
Interest income increased in 2016 from 2015 primarily due to higher interest income of $19 million recognized on the financing element of the service concession arrangement at Mong Duong, which became fully operational in April 2015.

2018
Service concession assets, net of accumulated amortization of $0 and $206, respectively - (2018) 1,360 (2017)
This was transfer as Loan receivable due to accounting policy in 2018
Loan receivable: 1,423 (2018)

Thank you
P/S: The main aim of the capacity payment is to serve bank interest and principal, without this contractual capacity payment no bank will lend the money. I think the immediate concern is whether any takers for the upcoming PP. The last two PP was successful because the PP takers know they can dump their 10% discount share to Mr. Koon.
21/04/2019 5:46 PM

Just to clear doubts, HFO is about 4 times more expensive than Coal in term of heating value.

Just to inform that I have refrained myself from answering to calvintaneng's ridiculous remarks. I believe it is a total waste of time.

If anyone found anything worth a concern, relay the concern and I will answer if deemed fit.

It is linked to national grid.

I believe Jaks IPP will be similarly affected as it is in northern vietnam too.

Vietnam's demand for electricity is currently growing at about 10-12%. Anticipating power shortage in coming decade.

Vietnam is anticipating a potential power shortage in the next decade largely due to its projected rapid growth.

Viet Nam will likely face a power shortage in the period 2020-30 if electricity generation is not increased and there is not enough fuel (coal and gas) for generation.

The warning was made at the Viet Nam Energy Forum held by the Ministry of Industry and Trade (MoIT) in Hanoi on Thursday. Aug 9 2018

According to Viet Nam Electricity (EVN), to meet electricity demand for socio-economic development up to this year, EVN has completed 40 power plants with total capacity of 20,586MW.

By the end of 2018, total installed capacity of the sector is expected to reach 47,768MW (5.41 times higher than in 2003), ranking second in ASEAN (after Indonesia) and 25th in the world.

It is forecast that up to 2030, demand for electricity will continue to grow at a high level. The electricity sector will need to ensure 265-278 billion kWh by 2020 and around 572-632 billion kWh by 2030.

Thus, the growth rate in the period 2016-20 is 10.3-11.3 per cent per year and the period 2021-30 about 8-8.5 per cent.

Ngo Son Hai, Deputy General Director of EVN, said that the electricity supply in the years 2019-20 could be ensured. However, oil-fired thermal power plants would have to generate approximately 4.4 billion kWh by 2019 and 5.2 billion kWh by 2020.

“During the years 2021-30, the electricity system may not meet demand and power shortages could occur in the south,” said Hai.

Hai said power shortages may increase up to 2025 under scenarios including high load or the volume of water in reservoirs being lower than previous years. Furthermore, the gas projects of Bloc B and Ca Voi Xanh (Blue whale) and several others are being conducted slowly compared with the plan.

"Each of the 1,200MW coal-fired power plants in the south facing slow progress will worsen the shortage by 7.2-7.5 billion kWh per year," said Hai.

-----------------------------
SarifahSelinder Why cannot supply other parts of Vietnam? Vietnam is a big country..

x linked to national grid ke?
21/04/2019 5:04 PM

SarifahSelinder Will Jaks face this same problem?

Is there a hydro power plant in the same distribution channel as Jaks IPP Vietnam that will have priority during a wet spell?

Explanation given by the IPP is;

"Despite being on reserve shutdown for much of 2017 (at the request of Electricity of Vietnam, given that the hydropower plants were running at high capacity due to unusually heavier rainfall), Mong Duong II was always ready when called to operate to meet our customer expectations."


Explanation;

As far as EVN is concerned, it is better to shut it down than to operate at low capacity. This is because it is very costly to operate at low capacity. It requires HFO (heavy fuel oil) to operate at less than 60% capacity. HFO is about 4 times more expensive than Coal.

----------------------------------------------------
SarifahSelinder Well indeed hydro is cheaper

DK66

Tapi kenapa have to shut down?

x linked to national grid ke?

Is there a hydro power plant in the same distribution channel as Jaks IPP Vietnam that will have priority during a wet spell?
21/04/2019 4:42 PM

Thank you for your compliment.

I share to help and hope to gain from others' generous sharing too.

-----------------------------------------------------
(2.6m shares buyback April ) Philip To be honest I am very impressed with dk66 on his research into JAKS, it is a good start as an investor, the level of detail is to be commended.

I always find those who can buy 35 stocks amazing as they are either have a very strong team of analysts to help, or they love to research on stocks or have a very strong analytical mind to know exactly how their chosen companies will perform over the long term.

Just reading and comparing peers and performance and comps on my few stocks is already almost a full time job.

Even more so reading almost 4-6 hours a day on annual reports,trade journals, similar companies, better investments at lower risk to replace my current stable of stocks, it will be a full time job when I take my early retirement in a few years time.

Kudos dk66, I truly hope you do well, and continue to put your research of JAKS into 2022 and use that mental model to see if your investment thesis is proven correct.

I myself used my past bitter experiences in investments and used it to improve my investment philosophy in the long term.

Your attitude will serve you well.
21/04/2019 4:31 PM

Extracted from my article "Understanding Jaks Hai Duong thermal power plant in Vietnam"

"https://klse.i3investor.com/blogs/Jaks%20resources/189891.jsp

"Information sourced from AES corporation which owns 51% of Mong Duong 2.

https://s2.q4cdn.com/825052743/files/doc_presentations/2016/AES-Q4-FY-2016-Financial-Review.pdf
Page 52 Mong Duong distributed US$46m to AES in 2016

https://s2.q4cdn.com/825052743/files/doc_financials/quarterly/2017/q4/02-27-18-Fourth-Quarter-FY-2017-Financial-Review_FINAL.pdf
Page 46 Mong Duong distributed US$51m to AES in 2017 "

https://s2.q4cdn.com/825052743/files/doc_financials/quarterly/2018/q4/02-27-19-Fourth-Quarter-FY-2018-Financial-Review_FINAL.pdf
Page 36 Mong Duong distributed US$45m to AES in 2018

Mong Duong 2 is 51% owned by AES Corporation



https://s2.q4cdn.com/825052743/files/doc_financials/annual/2018/2018-A...
Page 149

Year Ended December 31, (Revenue) 2018 2017 2016
Vietnam (2) (Million) 245 278 340

The Mong Duong II power project is operated under a build, operate and transfer contract. Future expected payments for the construction performance obligation are recognized in Loan receivable on the Consolidated Balance Sheets. See Note 18—Revenue for further information.
A significant financing arrangement exists for our Mong Duong plant in Vietnam. The plant was constructed under a build, operate, and transfer contract and will be transferred to the Vietnamese government after the completion of a 25 year PPA. The performance obligation to construct the facility was substantially completed in 2015. Approximately $1.4 billion of contract consideration related to the construction, but not yet collected through the 25 year PPA, was reflected as a loan receivable as of December 31, 2018.


qqq3 Posted by DK66 > Apr 21, 2019 3:49 PM | Report Abuse

Having considered the following information obtained from Mong Duong 2, my opinion is positive.
============

can u tabulate for us a summary of their results or provide us a link?

Having considered the following information obtained from Mong Duong 2, my opinion is positive.

Please note that the following results have taken into consideration mong duong 2 operation were affected by EVN's decisions to prioritise hydropower during the periods of unusually heavier rainfall. Its plant was shut down by 5 months in 2017.

1. Mong Duong 2 has distributed at least US$90m annually from 2016 to 2018,
2. Mong Duong 2 has received US$550m (1.95b-1.4b) in PPA tariff payments up to 2018, which is an annual average of US$157m (550m/3.5 years) from mid 2015 to end 2018. This has not accounted for the profit components.

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qqq3

so Jaks Hai Duong.....US$ 120 million pa can or cannot?

sustainable or not?

Dear Sslee,

You have failed to consider the following in your Mong Duong 2 analysis.

1. Mong Duong 2 has distributed at least US$90m annually from 2016 to 2018,
2. Mong Duong 2 has received US$550m (1.95b-1.4b) in PPA tariff payments up to 2018, which is an annual average of US$157m (550m/3.5 years) from mid 2015 to end 2018. This has not accounted for the profit components.

Please reconsider your analysis having regard to the information above.

BOT power plants will not participate in the government power plan which allows power plants to tenders power generated. It is because BOT power plants are governed by BOT and PPA agreements. However, it is vietnam's policy to prioritise power plants with the lowest generation costs especially during periods of heavy rainfall. This also explains why foreign invested insisted on fixed capacity charges to protect them from unusual times.

Thank You.

Sslee Dear Probability,
Base on revenue 2016 USD 340 million and net output 5,695,113 MWh. Per KWh is USD 5.97 cents. If 1.5 cents is the guarantee profit= 15x5,695,113 =85,426,695
Base on revenue 2017 USD 278 million and net output 3,398,354 MWh. Per KWh is USD 8.18 cents. If 1.5 cents is guarantee profit= 15x3,398,354 = 50,975,310
This is most likely the more expensive coal cost pass through.
What everyone should worry is the policy: BOT power plants will not directly participate in the power market; however, their dispatch will be impacted by the merit order.
The merit order: “at the request of Electricity of Vietnam, given that the hydropower plants were running at high capacity due to unusually heavier rainfall”
Our previous estimate max power output: 1200X365X24X0.77= 8,094,240 MWh
So 2017 capacity utilize only about 42%.
Revenue for 2018: USD 245 million even lower than 2017.

Thank you
P/S: So will JAKS Power plant generate USD 120 million/year of-net-of-tax profits for the next 25 year as what Clement Chua of Kenanga Vietnam visit IB report?
21/04/2019 8:34 AM

(2) The Mong Duong II power project is operated under a build, operate and transfer contract. Future expected payments for the construction performance obligation are recognized in Loan receivable on the Consolidated Balance Sheets. See Note 18—Revenue for further information.
A significant financing arrangement exists for our Mong Duong plant in Vietnam. The plant was constructed under a build, operate, and transfer contract and will be transferred to the Vietnamese government after the completion of a 25 year PPA. The performance obligation to construct the facility was substantially completed in 2015. Approximately $1.4 billion of contract consideration related to the construction, but not yet collected through the 25 year PPA, was reflected as a loan receivable as of December 31, 2018.

I didn’t expect Jaks forum to be so busy over the weekend. I m eating a McDonald burger while going through Jaks forum. I noticed that Mr Sslee has done a lot of research on Mong Duong 2 Power plant.

I would like to express my appreciation towards Mr Sslee for his commendable effort in providing credible support for his arguments against investing in Jaks. His views should be taken positively by Jaks’ investors. Who would bother to do so much research to prove his arguments for the benefit of those who wish to or already invested in Jaks? Most will only say “Vietnam will give so high return meh?” or “DK66 and Icon8888 are liers”. Thank you, Mr Sslee.

Dear Sslee,

If I may comment, while your arguments sound credible, but you have confirmation bias too. Your mistake was too eager to prove Jaks wrong. Since you do not have Jaks, you are in the best position to provide uncompromised assessment on Jaks. However, it seems that the information and analysis provided by you so far only painted a grim prospect of Jaks. You have not considered the risk-reward aspect of the stock despite the extremely low prices of Jaks few months ago. Even now, you have not given any consideration to Jaks’ price at RM0.80. You did not perform reasonable test on your analysis despite the analytical results showing contradictory or unreasonable conclusion. On top of all that, you can’t accept any stock that is less than perfect. A small black dot is all you can see on a piece of white paper.

Please allow me to take a moment to finish my burger first.

Thank you.

My oversight in the following formula;

Cost per BTU should be;

Cost per BTU = Total Coal Costs / (Total quantity of coal received x Heating Value of coal )

instead of;

Cost per BTU = (Total quantity of coal received x Heating Value of coal ) / Total Coal Costs

Dear Sslee,

Thanks for your opinion,

There is no gains without risks

We do not have many good opportunities in our lifetime. When you come across a life time opportunity, do not miss it or you will live to regret it.

All great successful people started off from betting on lifetime opportunities. A lot failed too.

Jaks to me is more than just an investment, it is a great business opportunity to me. You will not appreciate my point of view if you continue to assess its risks only.

You need to be a businessman, which I m, to understand the opportunity Jaks presents. There is not fairness in business world, it is all about control and bargaining power. Those in control will always make some personal gains out of the company, no big deal. Those with bargaining power always have the upper hands.

Investors have investing strategy, well diversified, cut loss strategy etc. In business, it is completely different. When you come across a gigantic deal, by all means you get the deal done even with huge mortgages. It is life and death.

Jaks took great risk to secure the Hai Duong power plant. The investment is too big for Jaks to swallow and it has to partner CPECC. Jaks has the bargaining power to get a good deal from CPECC. Andy defended its empire and secured bigger control during the great fall whether you like it or not.

My father once taught me. In business, do not be concerned with how much money people made from you by selling you a product, how much you can made from selling the product to others is more important.

How much you can make from Jaks is more important than anything else.


Below is my favourite;

Charlie Munger's Big Lesson: Prepare for Opportunity

What is the most important personal quality an investor can have?

Patience... followed by pretty aggressive conduct. It is given to human beings who work hard at it—who look and sift the world for a mispriced bet — that they can occasionally find one. And the wise ones bet heavily when the world offers them that opportunity. They bet big when they have the odds. And the rest of the time, they don’t. It’s just that simple.

Sarifah, Isn't his intention obvious ? He just want to buy cheap. Frustrated because the price is not dropping fast enough and worry the price can go up anytime.

If he is sincere about giving advice, why need to attack people ? Just present the facts will do. He think everyone is stupid and can't see through him. He has shown too much personal feeling and too much personal attack. How would anyone believe someone with such personality ? You must be trustworthy for anyone to trust you.

There are many ways to make money. This is just not me.

I always believe in win win for everyone.

I m tied to Jaks, I have experienced its great fall from 1.80 to 0.40 and now back to 0.80. I don't have a lot of money and here is all I have. I may die without a coffin or retire happily after this.

Only small minded people will say I will run with 100% gain from 0.40. 0.80 is not even half way from top 1.84 ! My heart is not as big as Trump's but definitely much bigger than those who said I m running now.


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SarifahSelinder DK66 is meticulous has the time dan bukan main cepat lg tulis analisis

U org ni don't want DK66 to b ur enemy

Every time u promote a share DK66 wil b there with his 3000 word article to shot it down

Bayang bayang kan la mcm mana u kan mampus nanti
19/04/2019 6:46 PM

On behalf of the Board, UOBKH wishes to announce that the listing application in relation to the Proposed Private Placement has been submitted to Bursa Securities on 19 April 2019.

" The tariff has two components: Capacity charge and the foreign component of Operation and (“O&M”), which are paid in U.S. Dollars and the local component of O&M and fuel charge are paid in Vietnam Dong. In addition, the U.S. Dollar and Vietnam Dong component of O&M are linked to a published Consumer Price Index of the U.S. and Vietnam respectively. Fuel costs in general are pass-through elements in the fuel charge "

This is consistence with my understanding on Jaks' PPA

Sslee, thanks for sharing the information

"As at the LPD, approximately 56% of the overall construction works at the project site have been
completed. The construction of the Vietnam Power Plant Project is expected to be completed by
the end of 2020." - Extracted from the PP proposal

http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download?id=94042&name=EA_GA_ATTACHMENTS