Posted by edkfc > 2020-12-22 11:57 | Report Abuse

Tks DK, you made it super clear and simple. More importantly this contract is just amazing and gives guaranteed returns to Jaks for 25yrs !!!

Posted by Peter6639 > 2020-12-22 12:43 | Report Abuse

Thank you DK

Posted by BLee > 2020-12-22 12:46 | Report Abuse

Very good flow diagram, hope some other counters have somebody like DK to give us info. Only info missing is the quantum; this could impact the viability of the BOT contract. My experience (not as knowledgeable as DK) of EPCC, EPCIC and BOT contracts, excuse me if opinion NOT agreeable, usually more advantageous to the main contractor.
The main contractor (for B portion) will has all the 'juices' and left the 'bones' to the sub-contractor. Is JAKS consider part of the main contractor (equal partner)? For BOT contract, usually at the end where the plant transfer (T portion), the plant will be at very bad condition due to operator (O portion) maximize for profit. I believed the quantum will play a part for the upgrade of the plant to guarantee the plant in good condition upon the transfer. I give my opinion for sharing purpose only and not to degrade any counters or buy or sell call.
Happy Trading

Posted by DK > 2020-12-22 12:54 | Report Abuse

Blee, thanks for your comment. I hope the following article helps you to better understand the JV.

https://klse.i3investor.com/blogs/Jaks%20resources/2019-09-22-story226058-Jaks_Resources_An_excellent_joint_venture_deal_with_CPECC.jsp

Posted by stockraider > 2020-12-22 13:23 | Report Abuse

This is a conman counter loh...!!

Run b4 too late mah...!

Posted by BLee > 2020-12-22 13:47 | Report Abuse

Thanks DK, I have being following your write-up and JAKS quite awhile, and gain alot of knowledge. There are many JV contracts with one supplying all the materials and workmen; and the other just doing minor groundworks. That's why I used the word "equal partner". If the profit is share equally based on capital engagement, then JAKS has nothing to lose. Otherwise, it just benefit the 'tai kor' (big brother).
Happy Trading

Posted by DK > 2020-12-22 13:54 | Report Abuse

Blee, are you referring to construction profit or operation profit ?

Posted by DK > 2020-12-22 13:58 | Report Abuse

As far as construction profit is concerned, we know that Jaks is likely to gain around RM440m from the USD454m EPC contract works which were fully subcontracted to a subsidiary of CEEC.

As for operation profit, it will be shared base on ownership.

Posted by BLee > 2020-12-22 14:42 | Report Abuse

DK, I am refering to both. The construction profit should be already 'in the pocket' for the first power plant (train). I read some where JAKS only do groundworks. Therefore, I presume the profit also include for the 2nd train.
As mention by @Sslee and confirmed in your flow chart, the operation 'profit' shall be by dividend only upon declaration. I wonder how this 'profit' shall be reported? I have nothing against JAKS and try to justify how to include JAKS in my portfolio..

Happy Trading

Posted by DK > 2020-12-22 14:45 | Report Abuse

Jaks will report the profit as "share of profit of associated company" in the P&L statement. Dividend will be reflected in the cash flow statement.

Posted by DK > 2020-12-22 14:56 | Report Abuse

Blee, in fact Jaks only did paper works. By the way, dividend is not profit.

Posted by BLee > 2020-12-22 15:24 | Report Abuse

@DK, noted. That's why I put as 'profit'. 'Paper works' can get so much profit? I very much likes a fair reporting and highlighting the risk by @Jennyloh
https://klse.i3investor.com/blogs/jennylohsharing/2020-12-17-story-h1538255239-JAKS_The_Identical_Power_plant_that_generates_RM_1_5_Billion_annualized.jsp
i) Every 3 years shutdown for major maintenance.
ii) Priority for Green Power plant to operate in preference for coal power plant.

Happy Trading

 Posted by DK > Dec 22, 2020 2:56 PM | Report Abuse 

Blee, in fact Jaks only did paper works. By the way, dividend is not profit.

Posted by DK > 2020-12-22 15:28 | Report Abuse

Blee, Jaks secured the power plant from the vietnam government. It has an upper hand in bargaining for share of construction profit when CPECC was selected by Jaks as his partner.

Posted by DK > 2020-12-22 15:30 | Report Abuse

The capacity payment will not be affected as long as the shut down for maintenance is within the allowance for planned outages.

Posted by BLee > 2020-12-22 15:47 | Report Abuse

@DK, many thanks. I am very clear on your flow chart. The capacity payment will partly fund the shut down (inclusive of manhours and equipment, etc) and others upkeep. TQ again

Happy Trading

Posted by DK > 2020-12-22 15:48 | Report Abuse

Blee, you are welcome. Thanks for your comments

Posted by sosfinance > 2020-12-22 22:34 | Report Abuse

DK, it's important to know what is the JHDP's dividend (and repatriation policy) and JAKS's dividend policy. If unable to know both, depends how good is your guessing game.

Posted by DK > 2020-12-22 22:39 | Report Abuse

sosfinance, JHDP's distribution policy is likely to follow Mong Duong II which is to distribute all idle cash to its shareholders as per its shareholder agreement. 100% USD foreign exchange and repatriation is guaranteed by the Vietnam Government. However, Jaks has no formal dividend policy yet.

-----------
sosfinance DK, it's important to know what is the JHDP's dividend (and repatriation policy) and JAKS's dividend policy. If unable to know both, depends how good is your guessing game.
22/12/2020 10:34 PM

Posted by Michael Dreamun > 2020-12-24 20:16 | Report Abuse

All about guessing and predicting.

Posted by DK > 2020-12-24 21:23 | Report Abuse

I only said what I m 99% sure of. Unless that is still not good enough.