THE BUZZ
Mudajaya announced on Bursa Malaysia yesterday that it has entered into a Memorandum of Understanding (MoU) with the government of Mandalay in Myanmar and Mr. Koon Yew Yin to facilitate the setting up of a coal-fired and solar-powered independent power plant in the region of Mandalay.
OUR TAKE
More details on the MoU. According to its Bursa statement, Mudajaya will set up a special purpose vehicle and hold a 70% majority stake in the venture while the remaining 30% will be held by Mr. Koon Yew Yin. A chartered engineer-turned-philanthropist after his retirement, Mr. Koon is no stranger to the local investing community, having founded Bursa Malaysia-listed IJM Corp when the company started off in 1966. Mudajaya added that it will prepare a feasibility report for submission to the Government of Mandalay for approval within the next nine months.
Growing regional presence. The announcement was within our expectation as Mudajaya’s management had, on various occasions, highlighted its intention of expanding its power presence in South-East Asia. That said, this piece of news is a positive surprise since Mr. Koon’s coming on board means that the venture would be able to benefit from his vast experience in the construction industry as well as his good name, which we believe may lend more credibility to the project.
TRADING BUY. While the capacity of the power plants was not disclosed, our checks with sources indicate that this may likely be about 200MW-300MW. Although this is comparatively less significant than the capacity at Mudajaya’s existing 1,440MW Chhattisgarh project in India, we are encouraged by the company’s unwavering focus in establishing itself as a major power player in the region. We are making no changes to our forecasts for now. Maintain TRADING BUY on Mudajaya, with our SOP-based FV unchanged at RM3.13.
Mudajaya announced on Bursa Malaysia yesterday that it has entered into a Memorandum of Understanding (MoU) with the government of Mandalay in Myanmar and Mr. Koon Yew Yin to facilitate the setting up of a coal-fired and solar-powered independent power plant in the region of Mandalay.
OUR TAKE
More details on the MoU. According to its Bursa statement, Mudajaya will set up a special purpose vehicle and hold a 70% majority stake in the venture while the remaining 30% will be held by Mr. Koon Yew Yin. A chartered engineer-turned-philanthropist after his retirement, Mr. Koon is no stranger to the local investing community, having founded Bursa Malaysia-listed IJM Corp when the company started off in 1966. Mudajaya added that it will prepare a feasibility report for submission to the Government of Mandalay for approval within the next nine months.
Growing regional presence. The announcement was within our expectation as Mudajaya’s management had, on various occasions, highlighted its intention of expanding its power presence in South-East Asia. That said, this piece of news is a positive surprise since Mr. Koon’s coming on board means that the venture would be able to benefit from his vast experience in the construction industry as well as his good name, which we believe may lend more credibility to the project.
TRADING BUY. While the capacity of the power plants was not disclosed, our checks with sources indicate that this may likely be about 200MW-300MW. Although this is comparatively less significant than the capacity at Mudajaya’s existing 1,440MW Chhattisgarh project in India, we are encouraged by the company’s unwavering focus in establishing itself as a major power player in the region. We are making no changes to our forecasts for now. Maintain TRADING BUY on Mudajaya, with our SOP-based FV unchanged at RM3.13.
Source: OSK
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