Greenko Share Discussion Threads

[mechanical trader] 09/12/2013 09:52

Buy shares in Greenko Group, the Mail on Sunday's Midas column recommended. The renewable energy company has a massive opportunity to supply power to India, where green energy is cheaper than coal and gas. The country has a big fuel shortage and has to import fuels. Greenko's wind farms and biomass plants can fill the gap. After some bumpy early days on AIM from 2007, sentiment on Greenko has strengthened and Singapore has invested £100m in the company. At 148p, the shares offer growth potential in the next year and beyond.

[banking1] 09/12/2013 09:00

nice move up - huff - i would say it depends how long your holding plan is - if they are going in the bottom draw for a couple of years - yes no harm in topping up. i see them at 175-200p by early next year imo (bought more at 140p)

[937huff26] 09/12/2013 08:40

Looks to me like this is right on the edge of the rising trend line, will it breakout? Do I top up? hmmm

[dr_smith] 09/12/2013 08:19

Only 15 minutes in and it's up 10%!!.
Can't see at the mo' if this is instititions buying, or possibly PI's if there has been articles in the weekend press?

[phowdo] 09/12/2013 08:18

Tipped in the dailymail. Should help clear remains of seller.

[pillion] 07/12/2013 23:35

Gold Cross too !!

[pillion] 07/12/2013 23:29

Tipped in tomorrow's Mail on Sunday

[alan@bj] 06/12/2013 12:22

Got another recommendation by Simon Thompson of Investors Chronicle today. The full article follows:-

It was difficult not to be impressed with the half-year results of Greenko (GKO: 148p), the Indian developer, owner and operator of clean energy projects.

Reported revenues increased by almost a third to €27.9m (£23.19m) and adjusted cash profits jumped by half to €24.6m, buoyed by a near 75 per cent increase in operating capacity from 244MW to 426MW. The group invested €118m in operating capacity in the six-month period and expect a further ramp up in output in the second half to end March to take capacity to well over 600MW by the next monsoon season.

Moreover, with £100m of new funding in place following the investment in Greenko Mauritius by an affiliate of the government of Singapore Investment Corporation (SIC), one of the world's leading sovereign wealth funds, Greenko is now targeting 2,000MW of operating capacity in 2018, double the target for 2015. It's realistic as Greenko has 608MW of projects under construction, and a further 1,337MW in active development, so is clearly making strong progress towards achieving that 2,000MW target.

Expect some positive newsflow on this front too. Analyst Adam Forsyth at broking house Arden Partners expects "the second half of the current year to be dominated by project completions with units at Mangalore, Basvanbagewadi and Balavenkatpuram all expected to commission before the financial year end adding 114MW." Furthermore, with the addition of further units at Basvanbagewadi and Balavenkatpuram in the spring, Mr Forsyth expects Greenko to have "at least 643MW in place before the start of the 2014 monsoon." In turn, earnings forecasts look well underpinned even after factoring a seasonal first half weighting to the numbers as wind and southern hydro projects benefit from the monsoon in that period.

Arden Partners currently forecasts that Greenko's revenues will rise from €36m to €50m in the financial year to March 2014 to boost adjusted operating profits from €16.3m to €29.6m. Revenues and profits are forecast to increase to €91m and €60.5m the year after. On that basis, EPS almost trebles from 5.4¢ in the 12 months to March 2013 to 15.4¢ in the 12 months to March 2015. This means that at current exchange rates Greenko shares are trading on only 11.5 times earnings estimates for the financial year to March 2015. And if Greenko can hit these targets over the next 15 months, as seems realistic given it has both funding and a development pipeline in place, then it is only reasonable to assume that the share price will start to reflect the upside that the SIC clearly sees in the revenue-generating potential of the power generation assets.

Mr Forsyth also points out that all of Greenko's renewable projects can achieve grid parity, the point at which they do not rely on state subsidies to turn a profit. In fact, due to the relatively high cost of coal in India, the cost of wind and hydro generation projects is below that of coal fired projects. In turn, this places the company in a far better position than other developers of renewable projects in other parts of the globe, not to mention an enviable position too.

True, Greenko shares have yet to hits the heights I expected when I initiated coverage when the price was 138.5p ('Buy signal flashing green', 18 Mar 2013). However, with capacity ramping up and driving up profits, the case to invest remains as strong as it was when I first highlighted the company's potential.

Target prices

As I have noted previously, Mr Forsyth values Greenko at 245p a share and has pointed out that "there is considerable potential in the shares and the prospect of more project completions should drive newsflow in the remaining financial year". I agree, and priced on a bid-offer spread of 144p-148p, I continue to see significant medium-term upside in the shares and maintain my 200p target price. Buy.

[banking1] 04/12/2013 12:31

i would also have expected share price action today but it looks as though after the sellers cleared out there is no current demand for the stock. you can bet on the share price racing north as soon as another II starts buying

[dr_smith] 04/12/2013 12:14

Yes it is.
On the other hand I was expecting a much bigger jump today.
GKO is a company that has brought home to me that the market doesn't tend to invest in slow burners even if longer term revenue is predictable and substantial.
I think we'll be having a conversation in a few years with share price £££ and we can say, yes and we bought in at a fraction.
As a bonus, when it rains, it's raining pound notes for us.

OK, they are in India and its rupees, either way we're flushed with success to reward our patience. ;-)

[milogleeson] 04/12/2013 11:32

Good results. Ticking along nicely.

[banking1] 21/11/2013 13:01

surprised the share price isnt on a steady rise given the wind farm being bought online.....looks like the buyers are happy with their holdings, and the sellers are out.

alan - very poor taste in humour

[banking1] 11/11/2013 12:20

GREAT NEWS OUT - surprised the stock hasnt continued to rally up!

[knackers] 06/11/2013 15:25

As things stand I think there's better value at Mytrah Energy - which has yet to mirror this re-rate (their share prices tend to follow one another for obviously enough reasons). MYT's new capacity/expansion is also slated for connect-up next month - almost doubling capacity.

[banking1] 05/11/2013 10:30

hi all

bottom line for me - the company is building its asset base/the output is being contructed and increased daily. on a 2 year play this could well easily double from here. Im looking to add on weakness with this one.

[dr_smith] 04/11/2013 16:48

Thank-you Alan.
Nothing really new to me - but by same token it is good to see I haven't missed anything - and nice to read as GKO have scarce presence in the news.

[phowdo] 04/11/2013 16:47

Interesting update from Simon Thompson.
However the pedant in me insists on noting that Pru and M&G did not both each acquire 1.4m shares. As stated in the holdings RNS.


"Therefore the 14.35% holding being disclosed in this notification is encompassed in the 14.76% being disclosed under The Prudential plc group of companies and is NOT in addition to it."

[alan@bj] 04/11/2013 16:25

DR_Smith - IC is indeed published on Fridays, but online subscribers get daily updates, and on Mondays Simon Thompson usually emails a couple of decent tips. Well worth the subscription in my view. This is what he said today:-

"I always monitor share-dealing activity in the shares of companies on my watchlist to see not only what the directors are doing, but also to monitor fund flows between institutions. That's because when you see a fund manager increase its stake in a company where the shares have been held back for no apparent reason, it can signal that a stock overhang is being cleared and the price could be ready to eventually make the upmove you had predicted.

And this is exactly what I think is happening in the shares of Greenko (GKO: 146p), the Indian developer, owner and operator of clean energy projects. It has proved a frustrating holding and one yet to make any meaningful progress towards my 200p-a-share fair value target, having originally advised buying the shares at 138.5p ('Buy signal flashing green', 18 Mar 2013).

However, that could all be about to change, as in recent weeks the price has been making headway, and on a bid offer spread of 142p to 146p, the March high of 152p is now within sight. Moreover, a breach of that level would signify a major chart break-out and open the way for a move towards my 200p target price. Importantly, there is very little overhead technical resistance above that March high until my 200p target price, so if a chart break does indeed occur out of the current trading range, it is likely to attract momentum buyers, too. There are several reasons to think this will happen.

For starters, I noted that both Prudential and M&S have acquired 1.4m shares in Greenko each in the past week to take their respective stakes upto 14.76 per cent and 14.35 per cent of the issued share capital. Having analysed the share transactions, it would appear that the first stake changed hands at 127.25p on 24 October and there were a number of other deals transacted around 130.25p a few days later. The subsequent rise in the price adds weight to the fact that a seller has been cleared out from the market and one that has most likely been holding back the price. On fundamentals, the case to invest remains as strong as it was when I first made the investment case.

Plugging into a green energy generation

To recap, my interest was sparked by a £100m investment in Greenko Mauritius by an affiliate of the government of Singapore Investment Corporation (SIC), one of the world's leading sovereign wealth funds. The shares are convertible on a one-for-one basis into ordinary shares in Greenko, subject to final adjustment between 1 July 2015 and 30 June 2017.

The funds are being used to ramp up the construction of the company's power portfolio and take advantage of the attractive power opportunities in India. Greenko is clearly making progress and has added six new run-of-river hydro projects totalling 425 megawatts (MW) to its active development pipeline. Two of these are additions to the existing hydro cluster in Himachal Pradesh and a further four projects will form a new regional cluster in Arunachal Pradesh, with site work expected to start late this year.

So, with the £100m new funding in place, Greenko is now targeting approximately 2,000MW of operating capacity in 2018, double the target for 2015. The aim is to increase the fully commissioned asset base from 244 MW in March 2013 to over 500 MW by March next year. At the end of September, the company had 412MW of installed capacity, but more than double that capacity including sites currently under construction, so is clearly making progress towards that 2,000MW target.

Greenko has also confirmed that the wind project at Balavenkatpuram is due to complete by the end of the monsoon season, and the site has been expanded to 200MW. This highlights the benefits of Greenko's policy of developing sites with incremental expansion opportunities. Moreover, it's the extra revenue and profit generated from the ramp-up in capacity that should drive the re-rating in the shares I have been predicting.

Strong earnings growth forecast

Following a pre-close trading update ahead of its half-year results on Monday, 2 December, analyst Adam Forsyth at broking house Arden Partners forecasts that Greenko's revenues will rise from €36m to €50m in the financial year to March 2014 to boost operating profits from €16.3m to €29.6m. Revenues and profits are forecast to increase to €91m and €60.5m the year after. On that basis, EPS rises from 5.4¢ in the 12 months to March 2013 to 15.4¢ in the 12 months to March 2015.

If Greenko can hit these targets over the next two financial years, then it is only reasonable to assume that the share price will start to reflect the upside that the SIC sees in the revenue-generating potential of the power generation assets.

Target prices

As I have noted previously, Mr Forsyth values Greenko at 245p a share and has pointed out that "there is considerable potential in the shares and the prospect of more project completions should drive newsflow in the remaining financial year". I completely agree, and priced on a bid-offer spread of 142p-146p, I continue to see significant medium-term upside in the shares and maintain my 200p target price. Buy."

[dr_smith] 04/11/2013 13:05

Hi Alan, I was going to say that may explain todays increase, but IC is a Friday publication and if anything share price went down a touch on Friday.
Did the article have any new tangible information about co's plans and projections?

[alan@bj] 04/11/2013 12:21

Got another push from Simon Thompson in Investors Chronicle today.

[pinkalltheway] 30/10/2013 12:48

Yes sellers cleared 175-80 here we come

[banking1] 30/10/2013 11:44

yes certainly looks like it phowdo - demand for the stock should pick up if this is the case. im hoping for 175p+ bought in at 110p, 115, 126p and 135p