Opg Power Ventures Share Discussion Threads

[dave4545] 23/10/2024 09:16

popcorn ready although not sure why ?

[rivaldo] 23/10/2024 08:08

A reminder of the Investor Meet presentation starting today at 11.00.....

[igoe104] 21/10/2024 06:28

Opg doing a investor presentation on Wednesday, you can sign up for it in the link above...

[andycapp1] 09/10/2024 22:06

Nothing has changed with this heap of dung. Gupta was a terrible CEO and his daughter seems no better. I sold years ago and wouldn’t touch with a 200ft bargepole. The non execs are also woeful.

[tim000] 27/9/2024 10:44

Yes, bamboo is a boondoggle!

[gb904150] 27/9/2024 10:38

The bamboo fields idea is a folly. Buying up fields? Processing bamboo to wood chips? Burning wood chips instead of coal? Who do we think we are, Drax?!

Think of the logistics involved in the above. Look at the low energy density. It is a waste of time.

If OPG showed just an inkling of interest in investor returns the share price could easily be 2-3x its current level.

For now they dodge the dividend question, don't engage via IMC (they postponed then cancelled the last one) and pursue follies of wood chips from bamboo.

That said, the backdrop is of a power plant that is worth multiples of the current Mcap in a booming economy with insatiable demand for electricity.

Even if they just allocated £2m as a starter for dividends it would set the right tone.

For now they are investor unfriendly, with a majority shareholder, hence the very low valuation.

[tim000] 27/9/2024 10:18

They’ve mentioned the plantations, bamboo I think? But it’s a small operation and will take a long time to make much difference. The move to net cash won’t stop significant annual interest payments. They still have a lot of expensive long-term debt finance, which costs more than the interest earned on their liquid assets.

[the original goldbug] 27/9/2024 10:13

Like the move from 5p to 10p was quick the move from 10p to 20pm should be quick.

Given there is essentially no leverage in the business their EBITDA is nearer to net profits than the per group as there are no interest costs.

Still it's an orphaned stock and they are still traumatised by what happened in Gujarat and the commodity price spike.

I was told they are looking at spending some money on plantations as they can put in wood chips as part of the mix, so that lessens their coal price spikes.

What they have created is the lowest cost model and cleanest balance sheet and I think the restructuring is now over and they will look to do something about their share price.

Also I think load factors are back to th high 80s now so even Cavendish's number looks very conservative for YE 2025. I suspect the EBITDA is closer to two.

[rivaldo] 27/9/2024 09:47

For those without access, Cavendish's new note has a 28p target price:

"We are basing our valuation on a forward EV/EBITDA multiple for OPG Power, based on FY25E. The peer group average multiple is 11.0x. We apply a small-cap discount for OPG, which we are conservatively setting at 30%, for a target multiple of 7.7x. This give us a target price of 28.0p, which is an increase from our previous target of 27.0p."

Cavendish summarise:

"Recovery confirmed – The cheapest way into India

OPG Power reported FY March 2024 results which were better than our forecasts at the EBITDA and net debt levels and in line or better overall. The period saw normalisation of coal prices following the disruption caused by Covid and saw Plant Load Factor recover to 69.2%.

We expect OPG to continue operating at good levels of plant utilisation, sustaining profitability and cash flow. We are introducing forecasts for FY March 2025E. We expect the net cash position to continue rising over coming years and, with the shares trading on an EV/EBITDA of only 3.0x to March 2025, OPG offers investors a cheap way to gain exposure to the dynamic and fast-growing Indian economy. Our price target of 28p is based on a conservative discount to comparable Indian companies."

"Valuation upside:

We value OPG by comparison with the Indian power utilities sector using EV/EBITDA multiples. The valuation table is included on page 3. OPG compares favourably to this peer group in terms of balance sheet strength and cash generation. We nonetheless base our valuation on a conservative small-cap discount of 30% for OPG, in line with wider market valuation trends, and arrive at a target price of 28.0p. The valuation is also underpinned by a strong asset base, with an NAV of 42.3p per share."

[dave4545] 27/9/2024 07:38

Agree.

Ample opportunity and generated cash to pay a dividend or do a buyback.

Over cautious

[tim000] 27/9/2024 07:33

They need to pay a dividend to attract investors. I think that won’t be for another year now. Unlikely to announce a dividend post interims.

[dave4545] 27/9/2024 07:31

They could say 280p and I still doubt there would be any reaction.

Not many investors left and I guess a lot of traders have also left the market or been wiped out.

tough times unless you are a old hand at this game.

Still think we should be worth double for fair value

[tim000] 27/9/2024 07:21

Cavendish has published a new research note. It compares OPG’s fundamentals with those of its much larger Indian peers and applies a 30% discount to the target price - reflecting increased risk for a small cap. The resulting target price is 28p. They forecast a slightly weaker outlook for the current FY, which I imagine is just being cautious.

[dave4545] 26/9/2024 07:19

I know the markets are rubbish but selling this at 10.21p is like selling a £20 note for a fiver.

[dplewis1] 25/9/2024 13:04

I bought the 35k a few mins back. Nothing major but looks undervalued to me

[rivaldo] 25/9/2024 13:02

At last - a well-deserved tick up. Should just be the start imho.

[philjeans] 25/9/2024 10:42

Should be tipped now in IC

BUY

[rivaldo] 25/9/2024 07:53

Since director/insider ownership is so high here I'm confident that the maximisation of returns to shareholders will be high priority - and dividends should be top of the list, hopefully this year with perhaps a £25m cash pile to consider.

[tim000] 25/9/2024 07:40

They’re still rather opaque on what their strategy is. No mention of dividends despite returning to net cash.

[philjeans] 25/9/2024 07:35

Quite agree Riv - some folk still selling tho!

[rivaldo] 25/9/2024 07:33

The results to March '24 are good - and the cash flows are fantastic.

OPG generated £20.8m of cash last year, i.e over half the entire £41m m/cap. It had £3.6m net cash as of March, so by now it's likely to have say a £12m-£14m cash pile.

NAV per share is 42.3p. PBT at £7.6m was well up from £6.1m (before impairment provision reversals).

Above all, the outlook is very positive. Coal prices have stabilised and Indian power needs are only increasing. And the promise is simply to continue producing huge cash flows to produce "returns for shareholders".

OPG simply looks very undervalued to me now.

[the original goldbug] 24/9/2024 09:35

I don't think it's got anything to do with the market makers is just that there is no real buying interest and if anything some long term sellers still in the picture.

However, they have committed to doing something about returns to shareholders and I am of the belief it will happen in q4 which will hopefully create a quick rerate to 20p.

[philjeans] 24/9/2024 09:04

Outstanding value but the MMs won't let it go.

Strong BUY for me

[tim000] 24/9/2024 07:51

Going back to coal prices, the June quarter results published on the OPG website show a Q/Q increase in power sales of ca 25%. That will largely reflect higher volumes. By contrast, the cost of materials (ie coal) increased by only around 17%, suggesting a decline in unit costs of up to 7%.

[igoe104] 24/9/2024 07:33

Just added a chunk...

These are a absolute bargain...

Results should be out in the next week and we already know they are fantastic...