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Oh - and for the record - I have again bought MYT today and yet the screen on this website shows it as a "sell" instead of a buy. What I've been doing every day is setting a buy with a very low purchase price (just in case I can tempt the seller). Yesterday it was 10000 shares at 24p (showed up as a sell). Today it was 10000 shares at 23.5p (showed up as 2x 5000 sells). All of these were actually buys. I actually think most of the trades we see on this website for MYT have been buys - especially when you see a value amount like £999 or a round number quantity like 5000 shares. You can often see looking at the bid/offer and what the transaction actually was too. I use HSBC and the last time I saw my buys actually show up on this website as buys was on the day the results were announced.
Absolutely! I've written on the chat board for OPG to ask anyone on there why they chose OPG over MYT. No-one has replied yet but my guess is that, as we've discussed before, their numbers look better. OPG also pay a dividend now at 800MW and are only just getting into solar. They won't be able to grow like MYT. And the Indian government just cancelled a couple of coal power stations as renewables are now a better option. It seems OPG got a bounce after being featured in Shares Magazine. Just goes to show that it'll only take a little media coverage.
From my research I think the big seller/s in OPG, MYT and KSK may be different. I can see the positives in OPG - cash flow, profit and paying a dividend. But what about the future? The Indian government just cancelled some coal power stations because renewables (especially solar) have become more attractive. I know OPG are into solar now but IMO if they want to catch-up they're going to have to sacrifice that dividend to reinvest for growth. Will investors be happy with that or will they be happy with a dividend and slower growth? Don't get me wrong, I'd quite like Mytrah to slow down and let the cash flow through to a healthy dividend - so I'm not saying OPG's strategy is necessarily wrong. But... Mytrah are now over 1GW and expect to add another 700MW this year alone (almost the size of OPG last year). Yet Mytrah is currently valued at just 1/4 of the market cap of OPG. Instead of paying a dividend at the moment they are reinvesting into more wind and solar. This isn't me trying to persuade anyone to buy MYT - I'm just putting forward some of why I chose MYT over OPG and interested in why you'd take OPG instead of MYT? Is it the dividend today? Thanks (I haven't mentioned KSK because they don't interest me).
The MYT profile page on the FT website shows recent institution buyers and sellers but I don't trust their data as I think I've identified approx. 1.5m shares by one institution that have been sold (TBC) that the FT website does not show. However it could be that they have been sold over May/June and this is the seller we're trying to identify. The FT website does show Premier and Henderson buying this year shares and we know Premier have bought a lot as they're in the top 5 holders of MYT now (shown on MYT website as of end of April 2017). If I keep going the way I am, I'll be breaking into the top 5 soon!
Glad to see you back saintpeter! You must be right - it's got to be a big seller like Capital - I'll see what I can find out.
Hi all - I don't own any shares in OPG but I do own shares in MYT. I was wondering why you chose OPG over MYT or KSK? I notice that the share prices of all 3 Indian power companies have fallen together since the back end of last year. I wonder if the big seller/s has been the same?
I'm intrigued that it's not just MYT that has suffered since Oct/Nov last year. The share prices of other Indian power companies, OPG Power and KSK Power, have both fallen over the same time period. The various online chat boards for these companies show people equally puzzled about the fall in these share prices. They also seem to be aware of a big seller in the market - and suspect that the selling has finished. So I wonder whether the seller/s of OPG and KSK are the same as MYT (in my mind, probably). Rather than there being any concerns over MYT, it could just be someone wanting out of India / Indian energy companies. I contacted a hedge fund that had a large stake in MYT and they confirmed that they do still own the shares and did not understand why it was as low as it is. OPG and KSK have often had much lower volume than MYT. June has seen OPG bounce with their results. I think we'll see all 3 recover together but IMO MYT is better managed. For the record, I don't hold (and won't buy) shares in OPG or KSK.
I hadn't heard of Fusionex. It seems very rare for a company to do this - with most delistings due to a takeover or insolvency. My first thought (based on the headlines) was what a disaster. But I looked into the CEO, read the proposal on their website and looked into matched bargain services. I'm now even a little tempted to buy some shares just to see what happens post-delisting! The company does appear to be hugely undervalued. Still, as much as I'm curious to see what happens, I won't buy shares because (a) I haven't followed this company; (b) it's fashion / tech that I don't understand; and (c) I'd rather buy more MYT. Like you say, hopefully it would be unlikely and difficult for MYT to delist in the same way. And the damage to personal and company reputation for doing so is a big risk to take (especially after seeing the fall out of another company doing it). But a hypothetical that they did... I would feel confident that my shares bought over the past few weeks/months would be worth considerably more in a couple of years time through a matched bargain service.
Thanks as always, Hounddog. And great job on GKO. Interestingly, even during that time of uncertainty it sounds like GKO market cap would have bottomed out around £80m - and MYT currently sits at £40m with more MW and assets! I saw a report last summer valuing GKO at $1bn based on the finance that they raised (a bit like Renew being valued at $2bn).
I'd forgotten about the delisting concern (I think you mentioned it a few months back) and you're right, it's a legitimate concern and I'd agree it's probably the reason for the stubborn share price. MYT share price first started to fall mid 2015 - the same time as the GKO delisting. There are some obvious similarities between MYT and GKO but there are some major differences that lead me to still see way more upside than downside. I've been researching it this morning and here's my amateur assessment... Both GKO and MYT had/have the same structure: London-listed companies that own a subsidiary in Mauritius that owns the Indian operations. There are many reasons this structure makes sense. However MYT owns 100% of its subsidiary in Mauritius, which owns 100% of the Indian company - and always has. So we own 100%. And if there ever was an IPO it would be the Indian business on the Indian market (which we own). The first problem Greenko had was they only owned 68.53% of their Mauritius subsidiary. Both GKO and MYT had/have a similar approach to raising finance: convertible and non-convertible debt (note: I am truly out of my depth now). The vast majority of MYT finance is non-convertible (they paid off their biggest convertible loan last year). GKO had issued a convertible loan to a Singapore company that offered shares in GKO (the company it only owned 68.53% of already). I think this is what got GKO in a mess. It meant (when the share price fell) the Singapore company could convert to equity, dilute the shares massively, and own too much of GKO. Inevitably the share price fell further, which made the situation worse. Check mate! Instead they agreed a deal to delist GKO where the Singapore company would buy them. And get this... even then they paid £160m (100p per share). I don't think MYT would delist for several reasons - Greenko wouldn't have if they weren't tangled up in a financial trap. MYT is bigger (based on MW) and better (operationally) than GKO was then. What happened with GKO 2 years ago can't have gone unnoticed at MYT and I imagine that they've done what they need to (if anything) to avoid a similar trap. Ravi has always been pro investors and seems - more than most - to recognise the importance and value of his reputation so I can't see a situation where MYT unilaterally delist themselves on valuation concerns unless shareholders were fairly compensated. Ravi wouldn't sell and they wouldn't buy themselves as the finance is needed to build wind / solar farms. The Kailas family are a major shareholder + Ravi last bought £250k of shares at 58p so I could never envisage a price to compensate shareholders being less than this (£95m market cap). And this is all hypothetical worst case scenario stuff! Of course I could quite easily be wrong. The biggest sign of confidence to me is if the directors all bought at least £20k+.
Thanks Hounddog - that's great. I agree - someone screening the numbers (with no desire for context) will see declining profit and declining EPS coupled with increasing debt. It doesn't feel good typing that! So we can rule those people out (until profit and EPS jump). As you say, institutions may not be able (or bothered) to buy in at the current market cap and small float. I wonder if some institutions have to sell when the market cap falls below a certain level too? So we rule those people out (until the market cap grows). Moreover the institutions / funds that might be interested in MYT are probably the same ones that were invested in Greenko (GKO) - and so may be sat on the sidelines. It's also worth noting that it's not just MYT that has suffered since Oct/Nov last year. The share prices of other Indian power companies, OPG Power and KSK Power, have both fallen over the same time period.
Here's my optimistic case: MYT raised $80m in an IPO 5/6 years ago when it made no money and had no assets (more than the market cap is now). Since then senior management have built one of the biggest IPPs in India with assets worth hundred of millions (won't debate the figure). They are also one of the fastest growing IPPs - nearly doubling in size last year and setting an even more ambitious target of 700MW this year. They now have a proven track record (reduces risk) and have a route to 4000MW by doing more of the same. All of this is supported by ambitious government targets in one of the fastest growing economies in the world (which was already in need of more of electricity). MYT have taken a fresh approach to building wind farms by using their own systems and data to select sites and improve margins. The market has become much more competitive but most of MYT's PPA prices have already been agreed for 10-25 years. And even then, falling electricity prices (a) means renewables are here to stay; (b) lower margins make it harder for new, smaller entrants - and may lead to buying opportunities; (c) the cost of the technology is falling too and is becoming increasingly efficient - e.g. taller towers, longer blades, turbines that talk to each other, etc. It was a smart move to diversify into solar - maybe a year late but they're there. Personally, I put a lot of emphasis on what I think of senior management as people. I've never met Ravi or Vikram but they come across as smart and honourable men in their writings and videos - especially Ravi. I can imagine the trusting relationships Ravi has created with lenders. I can imagine a decent culture at MYT. And I can see why they have won a number of awards. The Kailas family own a lot of shares and Ravi, in particular, has invested considerable amounts of his own money (just not recently). Vikram has spoke about their focus and decision making being on building a company to last 50+ years. So an optimistic valuation? MYT is more like a fast growing tech-start up than an old, sluggish utility company. IMO the debt looks worse than it is because the interest payments are being made before the assets are fully operational i.e. some of the assets constructed last year did not get the full benefit of a monsoon season. They will this year but the new assets won't until the year after and so on. I've written before about ReNew (2000MW) being valued at $2bn so $1bn could be fair. If you look at the comparison table for last year's results and add back in the refinance cost and the new shares issued, underlying profit was closer to $10m. A very conservative 10x would justify MYT being worth DOUBLE what it is now. And they could achieve that if they just stopped growing! For me I've come to an optimistic / I-think-reasonable estimate of $30m average profit if MYT used cash flow to pay off debt. A multiple of only 10 would justify MYT being worth 6x today at £240m.
Good to see you back saintpeter7 - so you're not the big seller then!? ;) I agree - and likes others said before - with the results out (even if they weren't as good as they are) we really expected the share price to jump. I know I've been hogging the message board a bit this week and I don't want to be tarred as a "ramper". For the record, I am a long-term investor in MYT, have continued to buy (even though a lot of my buys show up as sells on this website) and have no intention to sell any time soon. I have followed the company for 4 years and first bought at around 80p (which I thought was good value). I've been investing for 12 years and this is probably only the second time I think I've found a company that is truly undervalued (the other was Electronic Arts). I'd really like anyone reading this - especially anyone who has a negative view of the company - to share what you think the cons of MYT are as I must be missing something and need some sense talking into me! Here's my pessimistic case: MYT are currently loss making and have a lot of debt so it's not worth anything (let's assume the assets aren't worth what they are)! Even if you take profit or underlying profit at best, $4.76m on a multiple of 10 (for a utility company) would only be worth $50m. And that's conveniently what the market cap is. The other problem is it's getting increasingly competitive, prices are falling and so will margins. The company may also overextend itself by trying to grow too fast. Optimistic case to follow...
I've listened too - thanks for asking the questions share_talk. I have to say I was surprised you asked all of them! And you got the pronunciation of the company's name right by the end of the interview ;) For me, I thought Bob answered them sufficiently to put my mind at ease. Receivables will always be a risk but, inaction to what Bob said, I have read elsewhere about the Indian government guaranteeing payments (and improving the system). And MYT will be able to charge interest / penalties on late payments too. IF there is an IPO in the future (I have a feeling it's less appealing than it once was) then MYT will own 100% of the listed Indian company. Great! Because they're not going to raise less than £40m doing an IPO :) Just another reason this company is a bargain IMO. I also accept the reasoning for reissued shares now - to keep good staff (for at least 3 years) in a very competitive industry. Given the choice of that or losing key members of the team at this stage of growth, I'd take the hit every time. And at least it wasn't all one sided - they did cancel nearly half the total number of options. Still, I'd have preferred some sort of exercise price as a gesture to shareholders e.g. 30p.
Some bad news that the Indian government are preventing a way of raising money that MYT was about to use. I don't know much about but I suppose all I need to know is that the interest rate of the money they do raise will be higher than they were planning. You can see the story if you click on MYT share news at the top of the page.
Absolutely - great set of results! Reinvesting to fund / build more wind and solar then... repeat, repeat, repeat. A normal monsoon season this year with more assets working and growing by 70%+ in 2017/18. I can only imagine the pace of change. They've done an incredible job in my view. The main risk has been debt but, as I see it, they are handling that well (better than ever). The other risk has been falling costs but the majority of their portfolio is locked in to 10-25 year power purchase agreements at a fixed price. Falling costs of turbines and solar as well as becoming more efficient will help offset falling prices and, overall, it's better for renewables as they become even more attractive. I'm pleased there haven't been any shocks due to the new accounting. With MYT's structure I was concerned about how the new accounting would impact the "offshore" part of the company - and how hard that would hit net profit. It seems (and please do add to this or challenge me if you disagree) that MEIPL is "paid" for building the wind farms, which means some of those "earnings" were not subject to local tax. The new Indian accounting brings adds the construction revenue and cost in because this is completed locally. That means some of the earnings for building the wind farms ($16m) is back and subject to Indian tax. How do others interpret it? And for those who know more about accounting (I've set the bar very low), where could this have shown-up previously? "Other income"? Faster depreciation costs are a good thing in my eyes - especially at this stage - as (a) it is more realistic for the pace of technological change and (b) it allows MYT to write them off quicker while it's growing. I can't fault the company at this point. Better investor relations / updates would have helped over the past 6 months (I'm looking at you, Bob Smith) but they'll argue that they were nearly doubling in size. Just want more of the same this year and the order book, finance and staff who have done it before are already in place. Shouldn't the company be worth at least double this and probably closer to 10x?
I'm with you, SMTrading. Have you bought in yet? I'd like it if the directors bought some shares but appreciate they won't be able to at this time. On balance an IPO should be good for us... shouldn't it? Cross-listing will allow the company to be re-valued in a market that will value it considerably higher. They'll be able to refinance and raise more capital to help keep up with their rapid expansion, which is much bigger and faster than in the start-up days as they're growing the size of the old Mytrah every year now.
ME posted their accounts on June 24 in 2013 when they changed their year end (I think without going back and checking). The most likely scenario for me is that the Indian accounting change has caused a similar delay. The changes seem to be designed to stop moving local profits abroad to avoid tax but I don't think that will affect ME. At this point we're expecting a significant non-cash charge. I'll take the criticism that I'm comparing apples with oranges here but it surprises me that ME can be valued similarly to Good Energy in the UK <£40m. Good has a low margin energy sales business and 30MW of energy generation whereas ME has 1000MW and 3000MW in the pipeline. India electricity is approx. 1/3 of the cost of that in the UK but I imagine the costs to produce are relative with that. As long as they've managed their debt / cash flow wisely, I think there's still far more upside than down. And a note on that... More of my buys in May/June have shown up on this website as sells rather than buys!
I agree Hounddog - I'd have just released a statement to say the accounts will be released on X of June. RE: the big seller... why sell before the results when we're they're supposed to be "in line with expectations"? I have a few conspiracy theories!
Thanks saintpeter7 - so, in theory, would that mean that the sale of the £1.64m shares in April didn't all complete on that day (because there weren't enough buyers). So the mms have to then keep selling as the days go on until the £1.64m share have all changed hands? Thanks again