Opg Power Ventures Share Discussion Threads

[bubbabubbabubba] 18/12/2023 19:19

Bamboo probably sent the share price down tbf

[bubbabubbabubba] 18/12/2023 19:15

Dropping back in cos i watched the presentationWhat I found amazed meDebt free in 2029 no time soonNo spare cash on the balance sheet cos of debt and accounts payableThey lied about selling the solar assets no one wants itSomehow gonna use bambooThey have no intention of selling and no buyout offersShare buybacks and dividend not comingHow can you invest in this they don't care about shareholdersThey would of done a buyback at 5p if they wanted to do it

[dave4545] 18/12/2023 15:56

So much 2 way trade atm so not getting any movement either way not one change on
L2 today

[the original goldbug] 18/12/2023 14:59

That ultimately my thinking on this issue. Allow the industry a period of super normal profits or have no electricity...

[tim000] 18/12/2023 14:51

The main downside for me is that the industry is heavily regulated; power prices are not determined by market forces of supply and demand. Ultimately, however, if the country wants a reliable power supply it will have to pay gencos a sufficiently high price to incentivise investment in more capacity.

[nathandc] 18/12/2023 14:26

So demand makes perfect sense which will be serviced by thermal and why I am heavily invested here I challenge my self and this board on the real value of OPG and the perceived risk The question is for how long and what will be the tipping point ...

[tim000] 18/12/2023 14:20

For me, of far more importance is India’s rapidly growing power demand (including for air con), which makes thermal power generation capacity indispensable. India is planning to add thermal capacity for the foreseeable future, not remove it.

[nathandc] 18/12/2023 14:11

So the coal term - is relatively subjectiveHypothetically: a potential buyer would only consider x years. In my mind that would be 10 years Climate change pressure and the advancement of new technologies would be my argument. This is a risk factor for valuation but certainly but it well above todays priceHome work to do a 10 year projection...

[tim000] 18/12/2023 13:39

Renewables accounted for 9.6% of India’s power generation in November, compared with 78% for coal. The renewables share had declined over the previous 12 months; coal’s share had increased. I wouldn’t assume that, with very rapid power demand growth, this trend is going to change in the medium term.

[the original goldbug] 18/12/2023 13:33

Yes indeed the coal term duration would differ in Sweden from India of course.

I would say back of envelope on an 8% discount rate on a cross the cycle cash flow for a 25 year life cycle would have a present value of take your pick anywhere between £150m-1b! Haha

Your point is well taken but I don't think possible to forecast. Please don't by shy and give it a go though!

[tim000] 18/12/2023 13:32

That’s decades away, probably beyond the economic lives of the plant.

[nathandc] 18/12/2023 13:15

I question the real value of the assets and the revenue it will generate over the " coal term" The "Coal term" being the period where OPG is not impacted or replaced by renewables...

[nathandc] 18/12/2023 09:54

As they have come out and said the installed capacity is worth twice at today's market to build, that would would imply the company would be worth 80 This statement could mean they are looking for a buyer ? They have never been clear on the end game.

[the original goldbug] 17/12/2023 12:20

I think they want to build considerable cash on the balance sheet to finance taking it private, hence the apparent prevarication on buybacks and dividends.

It's a question of price and time. As they have come out and said the installed capacity is worth twice at today's market to build, that would would imply the company would be worth 80 pence.

Clearly they will be more opportunistic than that. I think Cavendish's 27p number serves several purposes...

The longer they leave it the more it will cost as cash will build very quickly in the current environment.

If this scenario is correct the directors will looks at discounts to book as a valuation yardstick and what comparables are trading. (I would guess mostly at 30% discounts to book).

I'm hoping if this happen by June next year we get 32-35p. That would be fair in my opinion. Much less would be painful and much more unrealistic.

[cousinit] 17/12/2023 11:31

Well, I'm so glad we have such a modest thought leader in charge of a cutting edge 21st century business...

[dave4545] 15/12/2023 10:51

Well this market has zero patience, if they are not flying nobody touches anything now.

It's just a totally different market.

On the plus side for OPG it's 12p bid, it was 6p bid a year ago so it has double from 12 months ago.

12.17-12.64p

[tim000] 15/12/2023 10:47

They’re loath to make any forward statements of any kind, which is not really surprising. They say that the construction costs of their current capacity is more than double the book value of their plant. Indian electricity demand is growing by around 10% pa, capacity is not keeping pace. The Golbug thesis is that profitability of thermal power generation has to increase if capacity is to keep pace with demand. If that transpires, the company will be highly profitable and the extra cash generated will answer investor queries about dividends, buy backs and debt repayment. It just won’t all happen overnight. But that’s nothing new.

[beangrinder] 15/12/2023 10:45

Nothing here to impress short term holders. Long termers must like the commitment to getting best value for all decisions. No headlong rush to waste money on M&A or capex for the sake of growth and being seen to be active. I like this approach but no clarity on dividends or buy backs. None likely anytime soon? Debt repayment still the focus and retaining cash/funds for flexibility on working capital.

[dave4545] 15/12/2023 10:34

Selling during the presentation guessing some people are not impressed.

Mind you it is a bit waffle waffle

Tim

What do you think ?

[dave4545] 13/12/2023 15:13

12.83-13.29p online

If nobody will touch it because it's "dull" then the only answer to get value is buybacks.

[igoe104] 13/12/2023 09:25

Cavendish 27p price target.

OPG Power has published interim results for the period ended 30 September. The company reports a strong balance sheet position and a sharp increase in plant utilisation driven by new supply contracts as discussed at the time of the FY23 results release in November. We believe that OPG continues to make a strong recovery following the coal price spike which impacted FY23. We are raising our target price to 27p, which represents 108% upside to the latest closing price.

[tim000] 13/12/2023 08:19

Margins should be higher in H2 as they transition away from selling to IEX and instead to state utilities. As they say, state utilities have slower payment schedules so net cash will be lower - the cost of doing more profitable business.

[dave4545] 13/12/2023 07:59

Opening 13-14p from 12.5-13.5p Cenkos/Cavendish on the higher bid