May 21, 2012
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Enjoying an Indian summer witha power plant tour
Our tour of Mudajaya’s power plant
site left us encouraged by the physical progress of the 26%-owned power plant which should not seeany
major delays after last year’s road
bump. All four 360MW unitsshould begin selling power by 2H13.
We continue to value Mudajaya at a40% discount to its RNAV. Clarity onthe progress of the Indian IPP andpotential power cashflows shouldrenew interest in the stock. Mudajayaremains a Trading Buy and not anOutperform because of the politicalrisks for the construction sector. Thekey catalyst is project awards.
Last week, Mudajaya
’s MD Anto
Joseph and CFO Kenny Lo took sevenanalysts and fund managers on athree-day trip to India. Robert KaviSingh, project manager and
Mudajaya’s site represen
tative led thetour of the 300-acre site of the26%-owned 1,440MW coal-firedpower plant in the district of JanjgirChampa in Chhattisgarh. It is amongseven coal-fired power plants comingup in the area.Unit 1 is targeted for testing by end-12.Construction of most key componentsis already in full swing. Mainstructures, i.e. boilers, boiler drums,chimneys, cooling systems and ESPs,are targeted to be fully completed by early 2013. Equipment/procurementof imported components (turbines, boilders and generators) undertaken by Mudajaya will be completed by end-12.
What We Think
Though there were no major surprisesduring the visit, we are encouraged by the progress on site. Details on thetargeted timeline for physical worksprovided more assurance that theproject is on schedule for full physicalcompletion and testing by mid-2013.
What You Should Do
Accumulate Mudajaya. The stock isamong the cheapest in ourconstruction coverage. Medium-termcatalysts are local job awards and thesigning of a fuel supply agreement(FSA) for the Indian IPP.
(60) 3 20849864
MDJ MK / MJYA.KLCurrent
Market Cap Avg Daily Turnover Free Float
US$439.9m US$1.16m 47.9%
RM1,379m RM3.54m 549.3 m shares
22.214.171.124.13.64.15867768594103Price CloseRelative to FBMKLCI (RHS)
V o l m
Revenue (RMm)8691,3471,5841,8762,137Operating EBITDA (RMm)284.1298.7344.7383.8376.7Net Profit (RMm)215.6231.0268.9321.1372.4Core EPS (RM)0.390.420.490.590.68Core EPS Growth25.8%7.2%16.4%19.4%16.0%FD Core P/E (x)4.5126.96.36.1993.70DPS (RM)0.0410.0800.0850.0900.095Dividend Yield1.64%3.19%3.39%3.59%3.78%EV/EBITDA (x)2.122.852.021.160.45P/FCFE (x)NANA58.3511.3015.50Net Gearing(33.5%)(15.4%)(12.6%)(16.6%)(17.0%)P/BV (x)1.431.451.150.920.74Recurring ROE39.3%27.7%25.1%23.8%22.3%% Change In Core EPS Estimates 0%0%0%CIMB/consensus EPS (x) 1.091.061.02
52-week share price range
SOURCE: CIMB, COMPANY REPORTS
Share price info
Share price perf. (%) 1M 3M 12M
Relative -1.8 -13.3 -29.0Absolute -6.0 -14.9 -29.6
Major shareholders % held
Dataran Sentral (M) SdnBhd24.3Mulpha InfrastructureHoldings Sdn Bhd22Brahmal Vasudevan 5.8