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It should based on track record. The Anning power plant is a good example. AP recoverd their investment in the Anning's project in just 2 years of operation! If hydroelectric power plan cannot make money then what will happen to all those coal fired plant? Let look at AP past and the coming earning reports and decide for yourself, no point guessing!
Eco Water issued a profit warning. It said that "with the general slow down in the demand for electricity in the PRC, the group intends to divest its investment in the hydroelectric project and is currently seeking potential buyers for the project."
In light of the above statement, can anyone tell me whether Asia Power's hydroelectric projects will add significantly to its bottomline?
Holding well!!
Bought more today. Hope the half year earning can perform up to expectation!
shplayer, ya, I agreed to a certain extend sell SZ NRI will rasie the necessary fund for AP to invest on their Hydro projects..but SZ NRI itself is a great company too. So even if the sale is not successful, then it may not be that bad too!
Bullrun,
The problem with the disposal of SZ NRI is not with AP. I am sure AP is keen to dispose of their interest in SZ NRI and reap a huge profit, more than 2005 profits. The problem is with the buyer.....so far no announcement of payment of the first tranche...which was due on 30 May.
That article was in Zhao Bao sometime back..The article just mentioned that AP's expect to recover their investment from Anning by 06. I did the rest of the calculations myself.
Disposal of SZ NRI already approved during the EGM on 16 June. SZ NRI itself is a very good company that had been generating profit to AP for the last few years. My guess is that the management find Hydro more attractive!!
Bullrun, I did not read that article. I thot you may have mistaken it with the construction of the Huzhu project......which would be ready within 2 years (from the date of announcement). Anyway, it is not material in my forecast.
Whilst the FA looks good for AP, my concern at this point in time is the disposal of the SZ NRI. The market will not be too kind to the price if the deal falls through. Do you have any info on the status of this?
shplayer, I read sometime back on news paper that AP's expect to recover all its investment from the Anning project in FY06. Since Anning only started operation in FY05, I drawing the conclusion that it needs only 2 years to take back what they invested. Well, AP made the investment in 02, so another way of looking at it is 4 years from the point when they started to make the investment. Which is more accurate? Did I get my information right?
Bullrun,
I browsed the 2005 Ar. Where does it say that hydro pllant break even in 2 years. What I read is that the Huzhu plant they are currently building will be operational in 2 years....i.e operational in 2008.
My take on AP..:
2006 should be a better year than 2005.
Disposal of the Mudanjiang wind power project should add in a net of about S$3.6m to the bottom line (in 2005 proj incurred 5.9m in opn cost and 2.3m gain on disposal.....net 5.9m-2.3m = 3.6m)
Increase in share of the Sichuan Anning plant should add about 0.132m to bottomline for 2006.
Acquisition of the Shi Yang and QianFo plants will enhance its revenue stream but not necessarily its bottomline.
Sale of Shenzhen NRI will net a gain of $10.73m....but think there may be a problem with deal going thru. Payment of the first tranche was supposed to be made on 30 May. To date....more than 1 month overdue...no announcement has been made about the receipt of the funds. Furthermore, mgmt hinted there may be a problem in their announcement of the ShiYang and Qianfo projects....where they said that financing of the SY & QF project will be from sale proceeds of the Shenzhen sale.....but if the sale does not go thru, it will be financed from internal funds and borrowings.
In the past AP had problems with successful execution of new projects.....but with the new management team, the seem to be more effective.
Even without the gains from the sale of Shenzhen NRI, I reckon the bottom line for 2006 will be up by about 40%...i.e. eps of 4.1cts. Of course, if the SZ NRI go thru, then eps will be about 7.1cts.
Perhaps we should ask singaporegal on her TA views...she is a KILLER with her predictions.
shplayer, Thanks. Looking into this interesting company. I read that their Hydro Power Plant take only 2 years to breakeven! If that is ture and that rate of return can be maintained, AP recent aggresive move into Hydro Power Plants will benefit the company in 3 to 5 years time. Let me know what you think about this!
Bullrun,
Haven't followed this counter.....so no comments at the moment. Will do my homework and revert.
May worth a lot more!! Share your thoughts!
Bullrun
'may worst a lot more' ??? was there a typo error? Thanks.
Keep an eyes on this. In 3 to 4 years time AP may worst a lot more if all their Hydro projects are successfully accomplished.
Market may be in the recovery mode for the first few days of this week. AP may break the 35c barrier!
As solid as ever. This is the real GEM.
Watch out for this closely when the market rebound!!!
hehe..I also cannot believe it! Thinking of holding for 1 to 2 years but this gem really surprised me with it strength to rebound. Perhaps many short sellers thought AP was affected by the corrections and shorted AP over the last few days. There will be panic buy back and I think price may break all time high of 37c the buy back continue!!
wah unbelievable?! AP gained over 10% within a single day ...should hv traded more to get the quick profit