As a small investor, our bullet is so limited. I applying diversify in investment all these years, but for this particular stock, am tempted to sell all my others shares to buy Gunung alone as the earning is so potential. With more than 150 MW hydro electric, the eps should be more than 20 sen annually after 2 years time. What said you?
Company depended on bus contract from government for National Service Programe, a baby never know outside world. Why still want to buy this kind of company?
Anyway, am not asking anyone to buy, I only would like to share more with Kakashit and anyone who is interested. Please go to Gunung website and see their press release, you will know more about it. Above is summary from kakashit but he did not calculate the eps as he is not in this field.My calculation of 20 Cts per share is based on the press given by the company. No assurance as well.
Gunung Capital executive director Iskandar Ibrahim said that based on a capital expenditure of RM10 million per megawatt, the hydrology characteristics of the individual sites, the subsequent energy yield, a relatively low annual operational expenditure, and a fixed income stream, the group is looking to meet its targeted 12-14% internal rate of return for each mini-hydro project. From http://www.thesundaily.my/news/803483
KLCI King, have you thought of 1MW means what to investor? 1MW is equal to 1000kW. The revenue from 1MW would be 1000kW X RM0.24 X 24 X 300 = RM1728000. I take 300 days as a year because there maybe some downtime for servicing. Gunung has 150 MW, means it can generate RM1728000 X 150 = RM259200000. The contribution start to kick in at year 2017.
If considered the start off cost, borrowing and etc, according to its director, the return should be at 12 to 14%, let me take 10%, the earning is RM25920000. To know its EPS, just divided it by its total shares 236102000, EPS is equal to 11 sen. But if 14%, EPS will up to 15 sen, In fact, Gunung has 195 MW hydro if I am remember correctly, I think around 150 MW already approved by TNB. Anyway, all my calculation could be wrong, haha... That is why I am quite afraid when want to convert my shares into Gunung.
When I look into the business of bank, you can see their EPS is drop, the property sector also suffer due to strict loan by bank, in fact, gambling sector and consumer sector EPS also drop. Strong stock like BAT, AMWAY EPS also drop a lot, not to mention the electronic company like GTronic. Plantation sector also suffering, if you look into their EPS, really sad loh, push down the price of Taann, WTK, INNO and etc. That is why I started to think, what business is stable and consistent? I think Gunung business in renewable electric is one of them. With 21 years contract, you can sleep well in home. The water works for you day and night. Some more this project already done in their installation, now is only waiting time to generate income. Finally, when I see the directors buying back the share every week, I have more confident in this counter, time will tells. I think I will give this share 2 years time before reaping the profit.
Example : I give u highway project, but I dun give you loan now.. What can you do? Can't build. Now I give you highway project, and give you loan to finance.. Now you can build and operate.
I make a serious wrong calculation on effective stake of Gunung in each of the mini hydropower. It only owns around 15% of the total mini hydropower. Earning is around 3-4 sen annually if not mistaken after 140MW of hydropower in action. Sorry for the wrong info above.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
Jian Bin Siew
238 posts
Posted by Jian Bin Siew > 2016-04-08 21:36 | Report Abuse
up again!