MIDF thinks things are looking sunny for Ranhill Utilities
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00:00 Today, it is Ranhill Utilities after MIDF came away from a recent visit of Ranhill's
00:06 LSS4 project feeling pretty good about its prospects.
00:10 It already had a buy on the stock but upped its target price from 73 cent to 80 cent,
00:15 which implies a possible upside of 16 percent from current levels.
00:19 To recap, Ranhill via 100% owned Ranhill Solar One was awarded a utility scale solar project
00:25 under the LSS4 bidding cycle back in 2021.
00:29 A 21-year PPA was originally signed with Tenaga but was later extended to 25 years in line
00:35 with the Energy Commission's decision following cost escalation across the industry during
00:40 the construction period.
00:42 A key advantage is the plant's proximity of only 100 metres to Tenaga's substation,
00:48 which reduces connection and right-of-way cost as well as minimising power loss.
00:53 MIDF believes that project returns could be quite attractive given relatively low capex
00:57 and a comparatively higher tariff for RS1.
01:01 Levelised PAT is estimated at $5-7 million per annum through the 25-year PPA.
01:07 Based on the plan's schedule, the PPA's scheduled commercial operation date or COD is 31st
01:13 December.
01:14 However, given faster than expected progress, management is looking at the possibility of
01:18 early COD by 30th November.
01:21 According to Bloomberg data, there are three buys on Ranhill and one hold, which comes
01:25 from Maybank IB.
01:26 This works out to an average target price of 71 cent, which is only 2 cent more than
01:30 its last close.
01:31 [music]