7/20/23, 7:25 PM SORRY ! I MADE A BIG MISTAKE ON JAKS RESOURCES CASH FLOW PROJECTION !

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Please Explain !
SORRY ! I MADE A BIG MISTAKE ON JAKS RESOURCES
CASH FLOW PROJECTION !
Gotyou
Publish date: Wed, 19 Jul 2023, 05:21 PM

I received the private message below on 17 July 2023. It came as a great shock to me. 

Dear Gotyou,

I work in a foreign owned 1200MW coal fired power plant company in Vietnam and I support your honest
effort in revealing truth. I wish to bring your attention to your most recent writeup on the cash flow projection
of Jaks Resources Bhd. Your projection assumed uniform revenue from the power plant. This assumption is
invalid as the IRR would have exceeded the maximum of 12% allowed by the Vietnam government (Circular
No.:56/2014/TT-BCT dated December 19, 2014).

The snapshot below is a table of capacity charges of a 1200MW coal power plant under a Vietnam BOT
contract for 25 years concession period. The capacity charge rates in the table are not uniform but reducing
over the years. This is contrary to the general belief that Vietnam power plants under special concession like
Jaks Hai Duong power plant will provide constant revenue stream for 25 years. I attached a few snapshots
to assist you in your computation of revenue. Please do not publish the snapshots as these are confidential
information. TQ

XXXXX

I searched for the circular (https://thuvienphapluat.vn/van-ban/Thuong-mai/Circular-No-56-2014-TT-BCT-

method-of-determination-of-electricity-generation-costs-272089.aspx?v=d) and found "The internal rate
of return (IRR) does not exceed 12%".

I am NOT ABLE to check the authenticity of the tables and formula provided to me as the information is
confidential.

https://klse.i3investor.com/web/blog/detail/gotyou/2023-07-19-story-h-245593807-SORRY_I_MADE_A_BIG_MISTAKE_ON_JAKS_RESOURCES_C… 1/10
7/20/23, 7:25 PM SORRY ! I MADE A BIG MISTAKE ON JAKS RESOURCES CASH FLOW PROJECTION ! | I3investor

I performed a calculation check assuming 25 years of uniform capacity charge rate using the first year's rate
from the table and the computed IRR was 16.34% !

The IRR computed base on the various charge rates provided by the table was 11.37% which is below the
threshold set by the Vietnam government.

I can't provide detail information on the charge rates. All I can reveal is that the capacity charge rate
gradually reduced by half mid way through the concession period and further reduced to one third
towards the end of the concession.

Although there is NO ASSURANCE that the capacity charge rates for JHDP follow the same pattern as the
rate table provided to me, I hereby declare that my previous article (below link) may be inaccurate as the
assumption of uniform stream of revenue from JHDP is likely invalid. If so, the revenue from JHDP will
decline gradually over the concession period. 

As the decline in capacity charge over the concession period is quite substantial, so is the reduction in
revenue of JHDP.

I apologize for my mistake and I wish to thank the message provider for this very important information. I
wish more kind people can share more confidential information with me. Sharing is caring. I promise not to
disclose anything without your consent.    

​ ttps://klse.i3investor.com/web/blog/detail/gotyou/2023-07-13-story-h-245713930-
h
WHAT_YOU_DON_T_KNOW_ABOUT_JAKS_RESOURCES

It is your responsibility to perform independent verification on the information provided herewith.

Thank you for your attention.

Gotyou

This article is purely for educational purposes. This is not a buy or

sell recommendation ! You should consult your dealers or
remisiers before making any decision.

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7/20/23, 7:25 PM SORRY ! I MADE A BIG MISTAKE ON JAKS RESOURCES CASH FLOW PROJECTION ! | I3investor

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SORRY ! I MADE A BIG MISTAKE ON JAKS RESOURCES CASH FLOW PROJECTION !

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https://klse.i3investor.com/web/blog/detail/gotyou/2023-07-19-story-h-245593807-SORRY_I_MADE_A_BIG_MISTAKE_ON_JAKS_RESOURCES_C… 3/10
7/20/23, 7:25 PM SORRY ! I MADE A BIG MISTAKE ON JAKS RESOURCES CASH FLOW PROJECTION ! | I3investor

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