Done some more digging. Coal has eased back quite a bit since last year and represents a huge input cost - roughly 60% of turnover last year at an average cost of about $60 per ton (Indonesian). There is bound to be complexity that I am overlooking but superficially OPG would appear to be making more cash right now from existing plant than the figures from last year would indicate.
All of this sidesteps the tricky business of exchange rates of course. And global meltdown.
M & G Investments have £40m in here, so if we are going to get our pants pulled down we will be in good company. I see the opposite to be honest, any further interest can only buy into the remaining 30%.
The growth is not coming as a surprise here so some will have been priced in, but I think this general dip has swung the odds in my favour. Macro stuff like currencies are a variable and warrant observation but the nuts and bolts here seem OK.
Can the directors and family who own half the shares buyout the rest of shareholders at an unfavourable rate? If this is not a risk then this share should rise by say at least a half to reflect improved revenues from increased capacity. Just need the transmission lines to be fully commissioned.
I took a small punt on this around Xmas before last and did OK. Exited quite early but with cash in hand. This looks like it might be a decent buy again. The capacity growth was understood back then but much of the execution risk has gone away now. Coal price and dollar/interest rates would appear to be the variables. Coal looks OK unless the Chinese go for a big stimulus - anybody's guess. Dollar and interest rates would appear to be a headwind. Got some at 90. Any comments?
I can't see (well hope it doesn't) it going down to 85p with the increased capacity coming on line for nearly a quarter of the year now, with more to come next month. The output of the 180 MW Chennai IV has been sold at Rs 5.5 per Kwh from June until next month. This compares with the average price achieved of 5.25 rupees for the other power plants. (In the June RNS). If the share price is being manipulated, I have used the manipulation to top up but now would like to see a steady rise. Long term hold for me
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