1月8日上午，公司承建的越南海阳2×600MW燃煤电厂工程二号机组2号锅炉受热面第一只焊口顺利开焊，标志着2号锅炉主体安装进入施工高峰阶段。
　　越南目前正处于雨季，为确保受监焊口一次合格率达到项目要求，项目部提前制作防风雨棚，并针对安全文明施工及风险管控工作进行了充分准备，严把安全、质量关，为受热面地面组装工作的开展奠定了基础。

why failure to get cash from China partner ? for what ?

The star tower has been completed. Waiting for authority approval.

1月7日，越南海阳2×600MW燃煤电厂工程110kV升压站区域电气设备安装正式开始。
　　 该工程110kV升压站的设备隔离开关和断路器采用北京ABB设备，电流互感器、电压互感器、避雷器、支柱绝缘子均采用西安西电设备。此次电气设备安装如期开工，为下一步倒送电工作奠定了基础。

My mistake. As at 31/12/2017, NO provision has been made for the BG dispute with The Star.

ok, thanks for the alert

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qqq3 not sure...u check again...

Are you sure ?

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qqq3 I think that refers to the residential block.

qqq3, under note 26 of 2017 AR, there is a provision of RM25m for LAD. Additional RM23m LAD provision was made in 2018.

No, already provided
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For the BG, doess Jaks need to report a loss of 50m in their next quarter earning?

The RM50m BG loss will result in Jaks writing off RM25m from the provision account now regardless of its future recoverability. If recovered, it will be treated as income . As the amount has already been provided, it won't affect the profit and loss account.

https://asian-power.com/power-utility/news/power-shortage-in-2020-2030-looms-over-vietnam

Vietnam is expected to face a power shortage in 2020 to 2030 given that it doesn't get enough coal and gas for generation, Viet Nam News reports, citing a forum held by the Ministry of Trade and Industry (MoIT).

Given the landscape of tight supply of power, IPP is set to become one of the most promising and stable business in vietnam over the coming decade.

Jaks vietnam power plant will start generating electricity in mid 2020.

1月4日，越南海阳2×600MW燃煤电厂工程二号机组2号锅炉汽包顺利就位。
　　越南海阳2×600MW燃煤电厂工程二号机组2号锅炉汽包长24.2m,重185.7吨,汽包筒体规格Φ1844 mm×160mm。汽包为悬挂式结构，安装在炉膛的前上方KA轴线和KB轴线之间，采用两根U形吊杆吊挂装置悬吊在锅炉顶部钢梁上，汽包就位中心线标高为52673mm。采用2台200t液压提升装置为汽包吊装的主吊机械，PQZ1400塔吊作为辅助机械，配合穿装汽包吊杆。本次吊装采用三维动画交底模式，形象生动。精细化的组织分工，确保了汽包的顺利吊装，吊装过程安全稳定。

2nd boiler of Unit 2 finished installation of the boiler drum.

The BOT, GGU, PPA, CSA are all there. The readers are smart enough to digest.

The Government Guarantee (GGU) provides Vietnam Government Guarantee on all payment obligations of MOIT under the BOT contract and the EVN under the PPA as well as all counter parties risks.

JAKS’ COAL SUPPLY AGREEMENT WITH VIETNAM NATIONAL COAL-MINERAL INDUSTRIES GROUP (“VINACOMIN”) (“CSA”)
The CSA provides for the delivery by Vinacomin and purchase by JAKS Hai Duong of coal for use in the Project from testing and commissioning until the termination of the BOT Contract or other circumstances as stipulated under the CSA. The quantities of coal to be supplied by Vinacomin will be determined, among other things, by the actual plant load factor and operating performance of the Facility and the quality and other characteristics of the coal used at the Facility. JAKS Hai Duong will have the right to buy from other coal sources in the event Vinacomin is unable to meet its obligations under the CSA and provided that the coal price from the other source have been agreed by both parties and approved by MOIT. There is no take or pay obligation (minimum order obligation) in the CSA.

JAKS Hai Duong will have the right to buy from other coal sources including import.

Jaks vietnam power plant will be using domestic anthracite coal.

JAKS’ POWER PURCHASE AGREEMENT WITH VIETNAM ELECTRICITY (“EVN”) (“PPA”)
The PPA provides for EVN to purchase and the BOT Company to sell electricity generating capacity and electricity generated by the Facility for 25 years after the commercial operation date of the Facility unless extended or earlier terminated as stipulated under the PPA. The tariff charged by JAKS Hai Duong to EVN comprises the capacity charge, energy charge and supplemental charge. Fuel (coal and secondary fuel) and limestone costs will be passed-through costs under the PPA.

Coal Costs are pass thru under the PPA. It won't affect the profitability of the power plant.

http://jaks.com.my/powerplant-progress.php

Vietnam ipp construction progress as at 31st Oct 2018

12月28日下午，公司承建的越南海阳2×600MW燃煤电厂工程沉煤池池壁混凝土顺利浇筑完成,本次浇筑历时7小时49分钟，共计浇筑580立方米。

In stock pick year 2019 competition, if i m not mistaken, only 2 contestants included Jaks in their portfolio including Icon8888.

Happy New Year 2019. Wish all of you all the best in 2019.

12月28日下午15时30分，随着越南海阳项目部#1-1电除尘第一根内顶大梁平稳精准吊装就位，电除尘内顶盖安装拉开了序幕，为后续电除尘阴阳极安装奠定了良好的基础。#1-1电除尘内顶梁共计20根，预计吊装时间5天左右。电除尘内顶梁吊装前，热动专业科积极引导班组施工，详细安排施工计划，一方面，提前组织班组将内顶盖相关设备转运到吊装现场，同时确保顶梁验收完成后即可满足吊装条件，提高吊装效率。另一方面，热动科提前组织对班组作业人员进行安全技术交底，交代清每个作业人员的作业位置、工作内容、安全、技术、质量要求，并对作业过程中可能遇到的突发状况、应急措施进行详细解读。内顶梁起吊前，专业科依据施工安全作业票逐条对起重机械、工器具进行检查，确保满足各项开工条件，吊装过程中，专业科全程旁站监督，并做好过程指导。目前，越南海阳炉后各区域施工有序，施工进度、安全、质量可控在控。

12月27日上午，越南海阳项目部#1-2锅炉省煤器管排正式开吊。后炉膛省煤器管排共计232组，每组由上中下三片组合而成，共计有696片。组合件单件尺寸为7340mm（高度）×7160mm（宽度），重量为3084.7KG。为保证省煤器管排顺利吊装，在热动专业公司的帮助与支撑下，项目部精心策划，认真准备，有序组织施工资源，合理安排施工工序，先后完成吊装方案编写审批、吊装前吊装条件确认、吊装前安全技术交底等准备工作，吊装过程中，专业科人员全程监督指导，确保吊装任务顺利完成。#1-2锅炉省煤器吊装预计一周左右全部完成，这将为接下来后炉膛右侧包墙、省煤器护板、省煤器灰斗等相关作业面施工创造了有利条件。当前，围绕2019年3月份锅炉水压试验节点，锅炉各作业面施工全面进入安装高峰，工期紧，任务重，越南海阳项目部全体同仁将不断转变思路和作风，凝心聚力，攻坚克难，力保各项节点按时完成。

There is nothing wrong with BS, FA, or TA. It is how good the analysts are at each of the them.

As KC has mentioned "Professional analysts who came up with a target price for Jaks without having the information of the future cash flows of the power plant (and also that of its other businesses), are simply not professional and lack credibility." So, not all FA analysts are equal.

Put it simply, if you got a right call, your method is good. Otherwise, you have to blame it on the racket as most badminton players do after they missed a shot. So, racket or skill ??

Kcchongnz,

I have defined my understanding of business sense. I m not sure if other i3 readers have a different definition.

In the case of Jaks, FA analysts disregarded earnings potential of Jaks Vietnam IPP. I presume on ground of insufficient information and clarity. They continued to downgrade the company on lower current earnings. It is not their fault to exclude uncertainties in their FA as they have to justify their calls. FA usually relies heavily on financial data and couldn't account for future earnings which cannot be reliably estimated due to lack of information.

Warren Buffett stressed the importance looking at companies that are within his areas of expertise to avoid large investing mistakes. He wants to know how a business makes money and be confident on the sustainability of its profit streams over the long-term. He called the process "judging the future economics of a business." - This is Business Sense.

When a newly incorporated company gets a casino license, is it a promising investment? FA and TA analysts can’t form any opinions as there is no financial data or price history to analyse.

Gamblers can tell you that a casino license is a license to print money. What brought them to their views? - Business sense, which they developed after many years of gambling. They know why people gamble and why the house always wins.

So, is it good to invest in a company which just secured a casino license ? With no prior data to analyse, you can only rely on business sense to make your decision. Most investors will jump in immediately as casino business is easy to comprehend. However, the decision will be harder if the company currently has other loss making business ventures. Investors will have to weigh the future potential earnings against current losses, and need a lot of confidence and patience to look into the future.

You can learn to invest using FA and TA through courses. You have statistics, ratios, and indicators to make your decisions on entry and cut loss points.

To invest in a stock using business sense is much harder than using FA and TA. There is no cut loss point and usually requires long term commitment. You need to understand the business as well as the directors. You must be prepared to deal with risks and uncertainties. You need to be able to evaluate the business opportunities and problems as there is no perfect business model. If you know enough, which is the most difficult part, you can ride through the ups and downs with confidence.

Business sense is not something that can be taught in school. It is gained through industrial knowledge, experience and learning, something that requires many years to develop. The most difficult being having to make logical judgement and assumptions where information is limited or unclear. There is plenty of rooms for imaginations and derivations. There is plenty of rooms for imaginations and derivations. A material omission or misjudgment can have fatal investment outcomes.

As most investors do not have sufficient knowledge and experience to effectively evaluate a stock using business sense. It is safer for them to rely on FA for fundamentals and TA for technical entry and cut loss points.

Conclusion : It is not wrong to invest using business sense but the method is very demanding and is not meant for all investors. FA and TA are safer for most investors.

Yes, God or Karma knows who are the bad ones here.

Ignore the question.... I don't know why I bothered to ask

Will you still call me a promoter of ALP ?

NO, I m NOT a promoter of ALP

Whether snake or dragon, just wait for the power plant to complete.

It will be a lot easier if you can tell the readers, with credible rationales, why the power plant will fail.

What do you achieve by calling me a promoter of ALP ? So that readers won't believe the facts about the power plant ?

No..... he is leaving the door open for him to come back

Did KYY say the power plant will fail ??

Has KYY said anything bad about the power plant ??

KYY has not changed his view about the power plant. He will buy Jaks when the power plant is completed.

qqq3, original planning ? You mean the management has original planning of another RM100m cash injection into vietnam JV for its 30% equity? How to be sure about that ?

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my computation is based on 20% gross margin from the EPCC...that is the original planning......
29/12/2018 21:48

Based on the value of the EPCC contract of US$454m and profit margin of 25%, the net profit of US$113m is sufficient for its future capital commitment of US$110 as disclosed in the annual report. No extra funding required.

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qqq3 in terms of hard cash, Jaks still need to find about RM 100 million to take up their 30% stake.....They should be able to do that.....the risk is not high at all......
29/12/2018 21:28

It is stated in the JV agreement with CPECC that the EPCC profit will be used to fund jaks' equity committment in JHDP in vietnam.

I can't just purely speculate on the management quality, I have to look at the facts presented to me.

Given the tiny size of Jaks, it is an achievement that Andy Ang managed to secure a RM8b power plant in vietnam.

It is common in corporate world to fight off intruders thru corporate exercises. Causing share price to plunge and killing opponents with margin calls. This is the dark side of corporate world that happens everywhere everyday.

A capable leader that can bring the company to new frontier is more important to me.

With the huge construction profit clocking in, the company is not likely to report losses for the next few year. That is beyond doubt.

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abang_misai DK,

Given what you wrote, I can say you are very analytical. But you miss the very important point. You seem do not know its management quality. Warren Buffet used to say if the management isn't trustworthy, there is no way the company will deliver. Time will tell.

http://www.theedgemarkets.com/article/jaks-anticipates-very-significant-profit-growth-next-two-years

JAKS Resources Bhd expects its profit growth in the next two years to be “very significant” as it recognises construction earnings from the engineering, procurement and construction (EPC) contract for its coal-fired thermal independent power plant project in Vietnam, according to the group’s chief financial officer Steven Ang Si Eeng.

The balance of the EPC contract makes up RM1.3 billion of the group’s total outstanding order book of RM1.88 billion as at Sept 30 this year. The remainder is derived from local infrastructure projects, such as sewerage and the Sungai Besi-Ulu Kelang Expressway.

Based on historic profit margin of 25% on Vietnam EPC works, Jaks has a balance of RM325m construction profit to recognise. It is not possible for Jaks to report losses from hereon.

Icon8888 did a good analysis on this point.
https://klse.i3investor.com/blogs/icon8888/185277.jsp

12月22日，越南海阳2×600MW燃煤电厂工程1号锅炉高温再热器进口管道焊接结束，受热面焊口累计完成23604只，至此，1号锅炉受热面小口径焊口全部完成。

12月23日，越南海阳2×600MW燃煤电厂工程2号机组1号锅炉受热面顺利开吊。本次吊装的受热面组件为左侧墙上部水冷壁，重21t。使用D1100塔吊为主吊，M2250履带吊为辅助抬吊。本次受热面开吊预示着2号机组1号锅炉受热面安装工作全面展开。

Power generation is one of the most secure, stable, and recession proof business in the world. Jaks has 40% economic interest in a RM8 billion power plant in one of most power hungry country, vietnam. However, it is only worth RM200m+ in valuation ! Any business sense ??

12月20日16时16分，越南海阳2×600MW燃煤电厂工程二号机组1号锅炉汽包吊装完成。
　　2号机组1号锅炉汽包长24.2m,重185.7吨,汽包筒体规格Φ1844 mm×160mm。汽包为悬挂式结构，安装在炉膛的前上方KA轴线和KB轴线之间，采用两根U形吊杆吊挂装置悬吊在锅炉顶部钢梁上，汽包就位中心线标高为52673mm。采用2台200t液压提升装置为汽包吊装的主吊机械，D1100塔吊作为辅助机械，配合穿装汽包吊杆。

Thanks, mkmk

I have already said a lot. I m not interested in picking up an argument.

The net movement will eventually tally with cash/bank balances

It doesn't regard the underlying cash movement.