Member Info for Hounddog10

Thanks for your posts SMTrading. Like you I would assume they should be closing 1,500MW - but where are the RNSs? I came to a similar valuation on a very crude DCF basis. However, I have a suspicion recent PPAs are not so profitable. They are clearly up to something - IPO/refinancing/investor exit. Probably all three but it is unnerving not knowing what. Bob Smith I have always felt presents very well but I am not sure how much of a finance person he is which makes me a bit wary. I agree that a move up to the main market would at some point be desirable but only if they are around FTSE 250 size or would get there rapidly. Otherwise better to be a bigger fish in the smaller AiM pond. I suspect the new listing they are contemplating is in India or on Singapore - both not hives of liquidity for small companies to my knowledge.

This is getting really very poor. Accounts have to be out by month end or suspension. There is also a complete absence of other news e.g. Successful tenders. It might be expected by now that some of the solar projects would have been built.

If the last accounts are to be believed there should be no problem. However, the uptick in volumes and decline in the share price hint of problems.

I think SP7 is right - the final 2016 results probably won't make much difference. I am a little worried about their accounting adjustment and the reason they gave did not look right. The depreciation has always looked a bit aggressive in places but why need to adjust revenue recognition? Surely it is just billed based on metering. None of this affects cash generation which is key here but I think the AiM market still looks at the p&l even though this type of company is really valued in a DCF basis. 2017 should be their year though.

MYT should have operating cashflow of $100m per year based on 1GW. This is after paying interest costs of $80m. They have around $850m of debt. If they stopped building now they could repay that in 7years or so. That would mean $180m of cash coming in for the remaining c15 years of the projects. Gives some idea of cash generation that Bob referred to in the interview and why when Cantor does a DCF valuation it got to 130p. Even that I think is out of date and if it was done now would be much higher.

The real action in my view is in 2017. They go in with 1GW and will build more capacity. It may well be a La Niña year and, unless more one offs, no $8m of refinancing and bonus costs. Could be $20m plus of profit

I don't think the company is an obvious takeover target and I don't think Ravi would sell (but everyone has their price). Having said that there is bound to be consolidation of these Indian IPPs (particularly the renewable ones) and Greenko was taken out by GIC (Singapore SWF) albeit that was opportunistic given that GKO's price crashed when the implications of a stupid mezz financing they had taken from GKO became apparent.

SMT. Firstly profit. This is a bit difficult to judge given big ramp up this year. The starting point is the first half year's results. That was a $6m loss but there were $8m of one off refinancing and bonus costs. So underlying was c$2m profit. The refinancing was done to save $4m pa but was only done in March so only $1m saved in first half. So the second half starts at $3m (2 + 1). Last year second half revenue was about 30% higher on more or less the same operating assets. In first half 2016 about 300MW of new assets came on stream. So in the second half they had 20% more assets. Overall I would expect $25-30m additional revenue in second half. However, costs (mainly interest) might be $15-20m higher. So $10m in the second half. Add to $3m to get to $13m Less $6m for the first half takes it to $7m. I think my assumptions may be a bit conservative so $10m for full year.

Yes Ravi Kaillas has certainly believed in the value of the company at a much higher price. I don't think he needs or wants dividends. This is about his third entrepreneurial venture and I understand he has been very successful before. Further, they don't have the distributable reserves unless they do some jiggery pokery like a capital reduction scheme - which would be very odd. They are still in build phase and need to retain or raise capital. I think once they hit 2GW they will become more or less self financing and can think about dividends.

I don't think it is currency. This is an INR based company reporting in USD. Since the Brexit vote it has appreciated quite a bit in Sterling terms. I doubt a dividend for a couple of years. The fall remains a mystery. There does appear to be a seller. It is always difficult to work out a seller's motivation e.g. they may simply need the money for other things.

Year end results - end Feb/early March.

I have followed many AiM stocks for quite a few years (rarely investing it has to be said) but this is one of the oddest drops I have ever seen. As you say HY1 results were not that great but largely predictable (I had hoped for a bit better but not by much). However, given the timing of the monsoon (and upgrades in capacity) the real action is in HY2. The monsoon is at least skewed two thirds to the second half. In the first half they made about $2m absent refinancing costs (plus the large bonuses they paid themselves for refinancing). My guess is $10-15m for the second half. Next year perhaps $20-30m for the whole year. Compare that to the current market cap.

I actually rang the broker/Nomad (Investec) yesterday to enquire as to what is going on and whether we can expect some disastrous announcement. They intimated no announcement and were rather phlegmatic. They noted a seller in the market (self-evident). I would be rather more worried if there was a lot of volume but this is getting rather silly. Surely we are in a false market (?) and some sort of announcement should be made. Anyway for better or worse I am holding and I would suggest for those willing to take a risk this is a very decent entry price (that I wish I had gone in on). Not a recommendation, DYOR etc.

The year end results are about three months away. I would expect some upward movement on that. These tiny trades look to me as just market maker meddling.

I don't think there is really any research beyond house broker. IC have, however, tipped this a number of times. I think These Indian power stocks are off the radar. Take OPG which announced interim eps of 4p which would lead one to believe around 8p for the full year (plus a maiden dividend). It's sp went down to 66p. MYT's problem is no profit plus difficulty of projecting profits given its heavy build programme. I am not expecting much movement up until next year when the financials become clearer and hopefully profits recorded.

I don't think that the volume has any relevance at the moment. I don't think the share price will move until the year end results are out.

I think locusts are a bit out of territory for Kosovo but a flood is definitely a runner - presumably the factory is at the bottom of a quarry.

Shaxe. The benefit from the refinancing was $4m per year. They did it in March incurring a $6m refinancing charge but saving $1m for the second quarter. For the second half they will save $2m. I agree with you this is one for the long term but it could start to move sharply up soon if results become apparent. I also have concerns about them taking it off the market just as it gets going. However, Ravi Kaillas repeatedly talks about IPOing this in part to give an exit for the Indian Infrastructure Fund mezz finance that matures in June next year. I am not sure what he means as MYT is already public. I think he doesn't see AiM as being public. The mezz finance is not well disclosed but as far as I can see is only about a 10% minority. In fact, if I read it correctly they already have the right under a call option to require IIF to subscribe at INR300 (c$6) per share. Quite why they have not done so is a mystery. Anyway, I am expecting some sort of corporate finance event next year.

Shaxe. Yes sorry about the auto-correct - stubbornly in action again. The $10m I calculated was not especially optimistic although it is particularly difficult to work out what the interest charge will be. We shall see - this will be a useful base year. They have not indicated there will be any more build this year. However, they are a bit erratic on timings. They said at the half year they would get to 1GW of wind in mid 2017 and six weeks later announced they were already there. Although good news that disconnect worried me a bit. Similarly on solar they seem to be indicating it is a while off (late next year at earliest is the sense) but on quite a bit of it they seem relatively advanced. Once you have got the PPA, land and equipment I think it is a matter of a couple of months to install. So may be much earlier than indicated that we get first solar. As you say, solar will balance out generation. However, I am less sure about profitability. Because solar is much easier engineering wise than wind I think the state auctions for contracts have been very competitive with a lot of chancers pitching very low and likely to go bust if they have won the contract. May in time offer a consolidation opportunity for the stronger IPPs.

I don't take the share price too seriously at the moment - too little volume and their results are too difficult to interpret. Take it as a buying opportunity. I agree the downside risk seems rather limited - particularly if they do make about $10m or so this year.