Posted by Siew Jian Bin > 2016-12-09 10:24 | Report Abuse

Very good comment! May I know where did you get the info that Selama is 13.80MW? I thought is 20MW. Also Maju RE for 60MW? I have no idea how to get the figure. I really appreciate your hardwork in preparing this article which I need it very much in order to make my decision to buy more or keep the share for future, tq!

Posted by Jay > 2016-12-11 08:43 | Report Abuse

the info are all extracted from the annual reports and the announcements back in 2013 when they purchased the subsidiary. you can refer there. the problem is Gunung doesn't disclose a lot about the details and progress. Since the total MW fits the 140MW described in annual report, I think it should be reasonably correct

Posted by Siew Jian Bin > 2016-12-12 11:43 | Report Abuse

Jay, thank you!

Posted by John Lu > 2016-12-12 11:53 | Report Abuse

Good article

Posted by probability > 2016-12-12 21:10 | Report Abuse

Thank you Jay. Good to have people like you here...
Articles like these are the most valuable in i3.

Posted by VenFx > 2016-12-12 21:35 | Report Abuse

Thx Jay for the break down. Hope u will do one in the future for Toyoink, which I found that might be more integrity sense after Mfcb.

Posted by Jay > 2016-12-16 01:05 | Report Abuse

toyoink is similar to Jaks. I heard there's some issues with the Vietnam government as well as funding that's why the power plant after so many years is still a no go

Posted by Jay > 2016-12-16 01:15 | Report Abuse

I'm not sure about the replacement value per MW but I can safely tell you that Gunung's EV definitely is nowhere near RM380m

1. Gunung MW is not 38MW
Like I mentioned, only when it's all fully completed, then there's around 140MW in which Gunung's stake is around 38MW. now I'm afraid most of them are far from completed

2. Investment needed first
Money don't come out of nowhere. You have to invest first in the hydro plant. The investment has to come out from cash/equity or borrowings.

3. Borrowings are not consolidated
The JVs most likely will fund the plant with borrowings but because JVs are not consolidated, the borrowings will not be shown in Gunung's financial statements. so actual indebtness is much higher at the hydro plant company level. those interest cost will eat into the plant profit once they are operational

Posted by valuelurker > 2016-12-16 12:47 | Report Abuse

On paper, it is a is a minority stake in the various JV's, but gunung will have to most likely fund the entire capex. That's just how these contracts work

Posted by Jay > 2016-12-16 14:31 | Report Abuse

not sure about their structure, but usually JVs the partners have to inject some equity and the rest based on borrowings. RM10m/MW is probably estimation, getting some excess funding just in case would be safer for the company.

another thing to note is usually those partners in those JVs are silent partners who may not have funding capability by themselves, i.e. cronies. so usually gearing up as high as possible is to minimise their equity injection. I'm not sure the RM550m are they referring to debts for certain JVs or all JVs or just borrowings for their part in the JVs

anyway, I wouldn't try to use EV method since so many inputs are not clear