POWER

MALAKOFF
CORPORATION
22 Mar 2016

(MLK MK EQUITY, MALA.KL)

T4 plant achieves COD

BUY

Company report

Price: RM1.60
Fair Value: RM2.10

Max Koh
max-koh@ambankgroup.com
03-2036 2299

Rationale for report: Company update

YE to Dec

FY15

FY16F

FY17F

FY18F

9.1
17.8

10.6
15.1

12.0
13.5

12.1
13.3

FD Core EPS (sen)

PE (x)

Published by
AmInvestment Bank Bhd (23742-V)
(A member of the AmBank Group)
15th Floor Bangunan AmBank Group
55 Jalan Raja Chulan
50200 Kuala Lumpur
Tel: ( 0 3 ) 2 0 7 0 - 2 4 4 4 ( r e s e a r c h )
Fax: (03)2078-3162

Source: AmInvestment Bank Bhd

In a Bursa filing, Malakoff Corp Bhd said its 1,000MW T4 plant in Tanjung Bin
achieved COD yesterday. This is in line with its targeted completion of March this
year.
The ultra-supercritical coal-fired plant was developed by its wholly-owned
subsidiary, Tanjung Bin Energy Sdn Bhd (TBE), for RM6.7bil. By achieving COD,
Malakoffs total net effective generation capacity has increased to 6,346MW from
5,346MW.
TBE has a 25-year PPA with TNB effective from the COD of the T4 plant.
Recall that TBE is the first IPP project awarded by the Energy Commission via a
competitive bidding process. It also signed a coal supply and transportation
agreement with TNB Fuel Services Sdn Bhd for the supply of coal to the power plant.
The T4 plant was built by a consortium comprising GE Steam Power Systems,
Mudajaya Corp and Shin Eversendai Engineering (M) Sdn Bhd. Construction began
in 2012 and it was completed on schedule.
T4 is located on a 65ha plot of land adjacent to Malakoffs existing 2,100MW Tanjung
Bin Power (TBP) power plant. Both plants share common infrastructure, such as
coal handling facilities, power evacuation, seawater intake and other access
facilities.
Malakoff said the new plant will enhance the groups profitability in FY16F onwards.
There are no changes in our numbers as we have already factored in contributions
from the new plant. In our model, we have computed the new plant to contribute
RM842mil (or 14% of groups revenue) this year, before increasing to ~RM1.4bil in
FY17F as it increases power dispatch. Our BUY call and DCF-derived fair value of
RM2.10/share is maintained.

The information and opinions in this report were prepared by AmInvestment Bank Bhd. The investments discussed or recommended in
this report may not be suitable for all investors. This report has been prepared for information purposes only and is not an offer to sell
or a solicitation to buy any securities. The directors and employees of AmInvestment Bank Bhd may from time to time have a position
in or with the securities mentioned herein. Members of the AmBank Group and their affiliates may provide services to any company
and affiliates of such companies whose securities are mentioned herein. The information herein was obtained or derived from sources
that we believe are reliable, but while all reasonable care has been taken to ensure that stated facts are accurate and opinions fair and
reasonable, we do not represent that it is accurate or complete and it should not be relied upon as such. No liability can be accepted
for any loss that may arise from the use of this report. All opinions and estimates included in this report constitute our judgement as of
this date and are subject to change without notice.

Printed by
AmInvestment Bank Bhd (23742-V)
(A member of the AmBank Group)
15th Floor Bangunan AmBank Group
55 Jalan Raja Chulan
50200 Kuala Lumpur
Tel: ( 0 3 ) 2 0 7 0 - 2 4 4 4 ( r e s e a r c h )
Fax: (03)2078-3162

For AmInvestment Bank Bhd

Benny Chew
SR VP Equity Research

Malakoff Corporation

22 Mar 2016

TABLE 1 : VALUATION MATRIX

YE 31 Dec
Revenue (RM mil)
Core net profit (RM mil)
FD Core EPS (sen)
FD Core EPS growth (%)
Consensus Net Profit (RM mil)
DPS (sen)
PE (x)
EV/EBITDA (x)
Div yield (%)
ROE (%)
Net Gearing (%)

FY14

FY15

FY16F

FY17F

FY18F

5,594.5
280.6
5.6
73.7
4.0
28.7
9.6
2.5
8.7
369.7

5,302.0
453.3
9.1
61.6
7.0
17.8
9.1
4.4
9.3
249.7

6,191.8
532.4
10.6
17.4
550.1
7.5
15.1
6.6
4.7
9.2
156.1

6,341.1
597.7
12.0
12.3
556.5
8.5
13.5
5.8
5.3
10.3
126.7

6,499.8
603.6
12.1
1.0
508.9
9.0
13.3
5.6
5.7
10.4
101.7

Source: Company, AmInvestment Bank Bhd estimates

AmInvestment Bank Bhd