Why JAKS is shooting up so fast?
Koon Yew Yin 3rd April 2017
The current issue of Focus Malaysia carries a full page article on page 18 about Serba Dinamik to encourage readers to buy the shares. My purpose of writing this article is to show readers the comparison of Serba Dinamik with JAKS so that they can make a better informed decision. You can see the comparison as follows:
Total issued shares: Serba Dinamik 1,334 million comparing JAKS 484 million
Current price : Rm 1.65 Rm 1.64
Market Capitalization: Rm 2,201 million Rm 794 million
Owns 9.8 MW in East Kalimantan owns 40% of 1,200 MW in Vietnam
Plans to construct 3 hydropower plant in Sabah
with a total 29.1 MW
JAKS’ market cap is about one third of Serba Dinamik but it owns a few hundred times more MW of power.
That is why JAKS shot up 16 sen today with 10.2 million shares traded. Out of the 10.2 million shares traded, I only bought 2.9 million shares.
JAKS has gone up from Rm 1.00 to Rm 1.64 in the last 3 months as shown on the chart below.
Many people have asked me to explain what is MW of electricity, how much of coal is required to produce 1 Mega Watt of electricity and how big is JAKS’ 1,200 MW power plant?
1 mega watt = 1,000 kilo watt and the current price for 1 kilo watt hour in Malaysia is about 50 sen. For example to light a florescence tube of 40 watt for 10 hour the cost of electricity will be 400/1000 X 50 sen = 20 sen.
Jaks’s 1,200 MW can produce 1,200 X 1,000 = 1,200,000 kilo watt X 50 sen = Rm 600,000 per hour. Assuming 50% efficiency the power plant can still produce Rm 300,000 worth of electricity per hour.
One ton of coal costing about US$ 50 can produce about 2 MW hour of electricity. JAKS’ 1,200 MW will consume 600 ton of coal per hour costing about US$ 30,000.
The above photo is Malakoff’s Tanjong Bin 1,000 MW power plant. Notice the ship delivering coal and the coal yard is more than twice of a football field. JAKS’ power plant is 1,200 MW which is larger than the one above.
After reading the above, do you still want to buy Serba Dinamik?
Like most investors, a very close friend just told me that he had sold his JAKS shares to take profit because it shot up too fast and he said that he will buy back during correction. What happens if JAKS continues to go up higher?
Most people who have sold will not buy back at a higher price because of shame. Just like one critic, Calvintaneng who told me that is better to plant durians that to buy JAKS. My advice to all my critics is to overcome their fear of share to improve, otherwise they will remain as poor as before. What is the use of writing nonsense? If they are so smart, they should write about the shares they have bought and also show their track records.
I am obliged to tell you that my wife Tan Kit Pheng and I are the controlling shareholders of JAKS. My wife has 39 million and I have 88 million shares. Please bear in mind that we do not need you to buy to support the share price. But if you decide to buy, you are buying at your own risk.