Opg Power Ventures Share Discussion Threads

[azalea] 02/6/2017 08:13

If the share starts climbing by 25/40% you may look to get back in. Somewhat missing the boat.

Not quite clear on your penultimate sentence?

[twistednik] 02/6/2017 06:27

Good debate folks !

I do believe this could be a bit of a value play but the trouble is that it can trade at even more of a discount before things get better. This leads the private investor to believe, wow this is even better value than before so I should buy more and you end up buying all the way down. Read 'Art of execution' if you want to see why this is a mistake.

When I take the rose tinted specs off, I'm more inclined to agree with Andy that the governance and flow of information does not give me confidence and hence I'm out. I'm just not sure I trust management and that they will act in the interest of all shareholders.

Examples like fusionex the other day don't help investor's confidence in foreign businesses listing on the U.K. Market.

Ultimately price doesn't lie and clearly institutional investors are staying well clear of picking up any 'cheap' shares and this doesn't fill me with confidence. If the share starts climbing to 55/60p I may look to get back in.

Part of the reason for my investment was exposure to the fast growing Indian economy.

Welll, I put some money into an India etf tracker last year which is 40% up and has diversified exposure to a basket of stocks. So feels lower risk and has a pretty good return.

It's difficult to argue that I shouldn't just put more money in the tracker rather than load up on OPG !

It really does need to multi bag to be worthwhile imho.

[ballychan] 01/6/2017 20:46

Nice chart showing drop in coal prices hTTps://tradingeconomics.com/commodity/coal

[andycapp1] 01/6/2017 12:15

The project debt should not have impacted the equity nav unless it was bad investment! It's supposed to enhance the nav over the longer term! So I don't get your comment! I'd imagine the nav per share is higher than 60p buts it's not a relevant valuation measure frankly. Discounted free cash to equity or EV/EBITDA or frankly sum of parts is better. I'd imagine this would give 80p plus some.

[luckymouse] 01/6/2017 11:21

I see it slightly differently - when the net gearing shot up the NAV plunged so the share price drifted down - so that's the issue - the Cantor note entirely blanks that for some reason - they may have put clients in. The board restructuring the debt acknowledges this reading the code between the lines. Net Tangible Asset Value Per Share is prob around 50p rising to 60p this yr - so my (rough) guess is 60p is fair value. It's like what is your house really worth minus a large mortgage. Catching the buyzone of 37p-42p would still make a nice % bounce tho.

[andycapp1] 01/6/2017 10:40

Fair enough. I'll revert to Azalea but he does utter ill considered bilge! Look the shares are undeniably cheap on financial ratios, PER, free cash yield etc. But as a minority you want protections and the comfort that your capital is being allocated well and fairly. They flout governance and the non execs seem to have little or no influence as the RNSs are very poorly written and seem not at all critiqued. So yes I agree it's cheap but it's cheap for a reason!

[rivaldo] 01/6/2017 10:20

http ://www.proactiveinvestors.co.uk/companies/news/178539/opg-power-ventures-back-on-an-even-keel-178539.html?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=7163-365886-Proactivity+-+31%2F05%2F2017

"OPG Power Ventures back on an even keel
09:15 31 May 2017

"We see this statement as evidence that the company has overcome the one-off events in Q3," said Cantor Fitzgerald

OPG Power Ventures PLC (LON:OPG), the developer and operator of power generation plants in India, traded in line with expectations last year.

Meanwhile, operations in the current financial year have been going well, as the group prepares for the construction of the 62 megawatt (mw) Karnataka solar project, which is set to begin in the third quarter of 2017. The commissioning of its first solar project should strengthen and diversify cash flows.

In the year to the end of March, the company generated around 4.37bn kilowatt hours (kWh) of energy, up from 3.35bn the year before.

The plant load factor (PLF) at Chennai dipped to 76% from 78% the year before, but at its newer plant, Gujarat, the PLF rose to 63% from 52%, well on its way to its targeted level of 75%.

“These figures have been achieved despite one-off external factors reducing output at Chennai during Q3. The site has clearly recovered and in April achieved a PLF of 79%. Gujarat’s lower figure reflects its ramp up during the year. It achieved 66% in April and is expected to hit 75% during FY 18,” noted broker Cantor Fitzgerald, which is very bullish on the stock.

The Chennai plant realised an average tariff of 5.18 rupees (Rs5.18) in fiscal 2017 and a deemed off-take charge of Rs1.50 per unit for deemed generation.

The difference between the tariff and the cost of coal on a per unit basis - known as the clean dark spread - was Rs2.63 at Chennai.

At Gujarat, the average tariff per unit was Rs4.03 and the clean dark spread was Rs1.37 per unit.

“These compare with our forecasts of Rs 2.54 and Rs 1.50, which overall is slightly ahead given the greater output at Chennai,” Cantor commented.

“The spreads were driven by an average landed coal price of Rs 3,526/t. The company has purchased coal recently on short term contracts which in our view seems sensible given the apparent direction of coal markets. It may allow it to better protect spreads in FY 18 although we are not adjusting forecasts at this stage,” the broker revealed.

Cantor also noted that cash collection has been improving, with OPG collecting £24mln of outstanding revenues from the Tamil Nadu state electricity company, TANGEDCO, with the remaining£11mln still outstanding expected to be coughed up in the current financial year.

"During the year we stuck to our strategic priority of maximising the cash contribution of our existing assets and thereby making our business stronger for the long term,” said Arvind Gupta, chairman of OPG.

“We have delivered on our commitment to start paying dividends following a continued strong performance by our flagship plant at Chennai,” he added.

“At the younger asset in our portfolio, Gujarat, our attention has been devoted to increasing the mix of higher value sales, accelerating slow receivables and establishing a significantly better debt repayment profile. We thus maintain our commitment to strong cash generation from our asset portfolio to fuel dividends and growth," the OPG chairman concluded.

Cantor reiterated its ‘buy’ recommendation and punchy 124p target price."

[luckymouse] 01/6/2017 09:40

If you stop provocatively calling him Flowerhead maybe he will back off a bit

Hi debt, hi receivables, lo , lo margin isnt a recipe for a runner - so broadly spkg he is right - if over doing it a bit - as are both sides perhaps

Hi , hi margin, lo debt, lo yld is one traditional screen for fast movers

The last update does show some improvements however so the next results will reflect that & the chart is at a value/buyzone around here - so it prob does warrant some range reversion to mean & a bit of a bounce at these levels

[andycapp1] 31/5/2017 12:26

Flowerhead, why spout such utter bilge. They haven't said anything different that will positively and sustainably close the gap to intrinsic value. So a relief bounce but unless they can find some proper long term buyers (OPG themselves might be a good start) then no reason to go much higher.

[ballychan] 31/5/2017 12:25

The seller and OPGs brokers have massively mishandled the sells.But what today's update provides is assurance and confidence that behind the low share price is a good operational business making good progress.

[smithless] 31/5/2017 10:45

Definitely undervalued and if I saw say 3m shares being crossed I would be in like a shot! Just wish whoever is selling into volume, would take a price for the whole amount and move on

[jozo] 31/5/2017 09:50

Agree rivaldo this should spark a decent bounce as long as azalea doesn't put everyone off with his constant drivel still some questions but potentially a new line in the sand!

[rivaldo] 31/5/2017 09:42

Very encouraging trading update all round. There should be a decent bounce from here - certainly if the seller has left the building (which he appears to have done judging by the rise this morning).

OT : Igoe, I assume you mean it was GMAA which bounced (and should continue to bounce)!

[shauney2] 31/5/2017 09:32

From proactive investors

" Cantor also noted that cash collection has been improving, with OPG collecting £24mln of outstanding revenues from the Tamil Nadu state electricity company, TANGEDCO, with the remaining£11mln still outstanding expected to be coughed up in the current financial year.

Cantor reiterated its ‘buy’ recommendation and punchy 124p target price.

[twistednik] 31/5/2017 09:07

Look undervalued to me and india economic update later today should be positive!

Sold out a little while ago though at a loss as just look at the chart - uninvestable imho. It's always jam tomorrow with the next project (now solar!)- I'd rather they just paid a 5% dividend to support the share price and invest any spare cash.

Will wait to see some catalysts steer the share price in the right direction first before investing. A nice bounce today but one swallow does not make a summer for OPG. The long and short is there are far better homes for your cash at the moment.

Good luck all !

[azalea] 31/5/2017 09:03

If the seller/s of 100,000 lots, were not distressed, then they certainly are now. Given the share price is still circa 55% below its all time high - when OPG electricity capacity and output was a mere fraction of what it is today, plus the payments of Interim and FY dividends, its only a matter of time before the share price reflects a realistic level.

[hybrasil] 31/5/2017 08:52

I bought 50k as an opener this am. Had to pay 43p. Have been following these since they were £1.

It has to be value at these levels

[big jim5] 31/5/2017 08:48

All going in the right direction.

I think they have learned a few lessons, disclosing the dark spread margin sinew and helpful.

[luckymouse] 31/5/2017 08:30

free stock charts from uk.advfn.com

[azalea] 31/5/2017 08:25

Nothing as transparent as seeing the share price rise off its longstanding low on good update; cheap as chips on all counts.

[qs99] 31/5/2017 08:16

Slowly and surely, 50p first stop IMO

[igoe104] 31/5/2017 08:09

Nothing wrong with the trading statement, everything is on track. the share price is at crazy levels, its definitely at top up levels.


This reminds me of another share I hold (GAMA) it kept dropping and dropping to silly levels, then suddenly it bounced ?

[azalea] 31/5/2017 08:08

Receivables being collected at a faster rate is another positive feature. All told, share price is undervalued.

[qs99] 31/5/2017 08:05

well market have marked up first thing, so initial reactions IMO seem to be decent? DYOR