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KUALA LUMPUR: JAKS Resources Bhd's share price advanced in mid-morning on Wednesday, April 14 after RHB Research sees sum-of-parts (SOP) fair value at RM2 due to Vietnam power plant, dam and property joint ventures.
At 11am, it was up 1.5 sen to 84.5 sen with 6.53 million shares done.
RHB Research said it believed the market has yet to fully reflect JAKS' power plant venture in Vietnam, which alone is worth RM676.8 million or RM1.54/share based on DCF.
"We thus estimate a SOP fair value for JAKS of RM2.00, which implies an upside of 141% from current levels," it said.
RHB Research believed JAKS' outlook is about to change for the better, given three major positive developments since March, which in its view will improve its financial position from FY2010/10.
These include the joint development agreement by 51%-subsidiary Jaks Island Circle (JIC) and Star Publications to develop a piece of land in Petaling Jaya.
JAKS received a letter of award for construction of the Paya Peda Dam in Besut, Terengganu for a total contract sum of RM333 million while it inked memorandum of agreements with various Vietnam authorities for a 2 x 600MW coal-fired power plant in Hai Duong province near Hanoi.
"We believe the PPA has also been confirmed with Electricity of Viet Nam (EVN), which is Vietnam's national power utility," it said.
