Utilities Sector

• Barito Pacific (BRPT IJ)‘s 64.7% stake in Barito Renewables Energy (BREN IJ) (now Indonesia’s largest company by market cap), is worth 8x its market cap. That’s unsustainable.
• Preceding my comments on the Barito complex are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Water Affairs
• Health And Happiness (H&H)

• TLNE has come under pressure after news of AEP and EXC protesting the power purchase agreement between TLNE and AWS. AEP and EXC are asking for a hearing by FERC
• The process creates a headwind for TLNE and the timing of when, or if, the remaining $300M would be released in TLNE’s agreement with AWS.  
• The signal AEP and EXC are sending supports the long-term view on power supply. The power being diverted to AWS would put greater stress on the regulated power companies

• On June 24, a share purchase agreement was signed between Brookfield and several shareholders, to acquire 53.12% of Neoen’s outstanding shares at €39.85/share. Brookfield has also received irrevocables for 4.36%.
• The offer price is generous and this looks a done deal. Spread 5.19%/7.29% (gross/annualised) seems interesting in spite of the longer approval process in energy deals.
• The convertible NEOEN 2.875 14-SEP-2027 has a balanced profile. It is trading at (mid) 100.75 (vs. €37.82), vs. a fair price estimate of 113.773.

• China Gas Holdings (384 HK)‘s FY24 result is distorted by non-recurring items and provisions. Adjusted net profit, however, has declined by only 4.3%, and is only 2.6% below consensus. 
• FY25 guidance looks positive as a 6% increase in dollar margin and a 5% increase in gas volume are expected. The Apr-May operating figures support such projections.
• China Gas maintained its DPS despite a drop in reported profit, showcasing its confidence. Assuming the same dividend in FY25 and FY26, it will sit on a yield of 7%. 

• Spruce Power Holding Corporation (Spruce) is one of the largest third-party owner-operators of residential solar assets.
• The company is not an installer of solar assets and instead grows through the acquisition of mature portfolios of residential solar assets and contracts.
• Spruce’s portfolio consists of residential solar power purchase agreements (PPAs) and solar lease agreements (SLAs) and has grown at a 29% CAGR since 2018, reaching 75,000 home solar assets and contracts. 

The attractiveness of Telecom Plus’s (TEP’s) bundled utility proposition underpins the progress made in FY24, with record profits and customer numbers. The normalisation of energy prices in the year was offset by growing non-energy prices, while the growth in the customer base to over one million clients helped to boost profits. Management expects to deliver 10–15% growth in net customers in the medium term and is confident in the outlook.

• Barito Renewables Energy (BREN IJ) listed on the IDX in October 2023 and inclusion in global indices was expected in June and August.
• The IDX threw a spanner in the works by placing Barito Renewables Energy (BREN IJ) onto its Watchlist under criteria 10. That resulted in cancellation of index inclusion in June.
• Barito Renewables Energy (BREN IJ) will come off the Watchlist today and that could see a renewed move higher in the stock over the next few weeks.

• Pathward Financial, Inc. is a BaaS company that partners with prepaid card issuers to provide prepaid card services to consumers and businesses
• Prepaid cards are used for various purposes such as fintech apps, payroll, gift cards, or rebates, with Pathward acting as the banking sponsor for these programs
• Pathward earns revenue through collecting deposits, investing in higher-yielding assets, and earning revenue from payments such as interchange fees, with impressive financial metrics including an adjusted NIM of 4.5% and ROTE of 30%

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• China Jinmao Holdings
• ENN Energy
• ENN Natural Gas
• MGM China Holdings

• Infratil Ltd (IFT NZ) aims to raise around US$613m (NZ$1bn) via an institutional placement.
• Proceeds from the placement will be used to fund IFT’s share of capex for its data center arm, CDC.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• A combination of strong demand growth, portfolio diversification, and strategic expansion has helped NextEra Energy post solid financial results for the first quarter of 2024.
• The company reported an 8.3% year-over-year increase in adjusted earnings per share, driven largely by the performance of its Florida Power & Light Company (FPL) and Energy Resources segments.
• FPL’s earnings per share increased $0.04 year-over-year, the primary driver being a growth of approximately 11.5% in the company’s regulatory capital year-over-year.

• Atmos Energy Corporation has provided an update on their fiscal 2024 second quarter results in their latest earnings call.
• The company reported a year-to-date net income of $743 million and has revised their fiscal 2024 earnings per share guidance to a range of $6.70 to $6.80, indicating a sound financial performance.
• The company attributes their performance to the commitment and hard work of its employees in modernizing their natural gas distribution, transmission and storage systems, and providing reliable service to their 3.4 million customers.

• Vistra Energy’s first quarter 2024 earnings revealed a company with a positive outlook for long-term growth, yet with some challenges ahead.
• Positive remarks were made on improved market dynamics in the power sector and a significant increase in long-term outlook for the company.
• A substantial execution plan was also presented, primarily focused on delivering reliable, affordable, and sustainable power amidst increasing power demands.

• Aegis Logistics (AGIS IN) is significantly expanding its LPG and liquid logistics infrastructure across India with rising demand.
• Currently, Aegis has a 15.5% market share in LPG imports in India which they plan to take to 25% in the next few years.
• Surpassed INR 1,000 crores in normalized EBITDA for FY ’24, planned capex of 4500 Crores by FY27.

• FY12/23 revenue was JPY33.6bn (+89.6% YoY), gross profit JPY8.0bn (+37.1% YoY), operating profit JPY3.6bn (+178.5% YoY), recurring profit JPY2.0bn (JPY1.4bn loss in FY12/22), and net income attributable to owners of the parent of JPY1.1bn (JPY1.5bn net loss).
• The company posted revenue growth and profits as electricity sale income rose due to higher installed capacity (generating recurring revenue), orders expanded in the O&M business, and one-time revenue businesses grew in Japan and overseas.
• For FY12/24, the company forecasts revenue of JPY20.5bn (-38.9% YoY), operating profit of JPY5.1bn (+42.0% YoY), recurring profit of JPY2.5bn (+24.3% YoY), and net income attributable to owners of the parent of JPY1.5bn (+37.9% YoY).

• Q1 FY12/24 revenue: JPY3.9bn (-17.3% YoY); gross profit: JPY1.4bn (-26.6% YoY); operating profit: JPY355mn (-59.0% YoY).
• Q1 FY12/24 net loss: JPY178mn; driven by higher-than-expected profits in Spot business (overseas) and Power Production (Japan).
• Recurring business revenue: JPY3.2bn (-1.9% YoY); gross profit: JPY740mn (+21.3% YoY); Spot business revenue: JPY680mn (-52.8% YoY).

• Q1 FY12/24 revenue: JPY3.9bn (-17.3% YoY); gross profit: JPY1.4bn (-26.6% YoY); operating profit: JPY355mn (-59.0% YoY).
• Recurring loss: JPY174mn (JPY628mn profit in Q1 FY12/23); net loss attributable to owners: JPY178mn (JPY452mn net income).
• Power Production business (Japan) gross profit exceeded forecast by JPY410mn; Spot business (overseas) gross profit exceeded forecast by JPY670mn.

• Q1 FY12/24 revenue: JPY3.9bn (-17.3% YoY), gross profit: JPY1.4bn (-26.6% YoY), operating profit: JPY355mn (-59.0% YoY).
• Recurring loss: JPY174mn, net loss: JPY178mn, attributed to higher-than-expected profits in Spot business and Power Production.
• Revenue breakdown: Power Production Japan: JPY2.5bn, Power Production overseas: JPY90mn, O&M: JPY710mn; total installed capacity under O&M: 2,218.0MW.

• Q1 FY12/24 revenue: JPY3.9bn (-17.3% YoY), gross profit: JPY1.4bn (-26.6% YoY), operating profit: JPY355mn (-59.0% YoY).
• Recurring loss: JPY174mn, net loss attributable to owners: JPY178mn, higher-than-expected profits in Spot (overseas) and Power Production (Japan).
• Revenue in Recurring business: JPY3.2bn (-1.9% YoY), gross profit: JPY740mn (+21.3% YoY), GPM rose 4.5pp to 23.3%.

• In Q1 FY12/24, revenue was JPY3.9bn (-17.3% YoY), gross profit was JPY1.4bn (-26.6% YoY), and operating profit was JPY355mn (-59.0% YoY).
• RJ posted a net loss attributable to owners of JPY178mn, versus a forecast of JPY880mn loss, due to higher-than-expected profits in the Spot and Power Production businesses.
• Installed capacity of power plants under O&M contracts increased to 2,218.0MW at end-Q1 FY12/24, targeting 2,300.0MW by end-FY12/24.

• Q1 FY12/24 revenue: JPY3.9bn (-17.3% YoY), gross profit: JPY1.4bn (-26.6% YoY), operating profit: JPY355mn (-59.0% YoY).
• Recurring loss: JPY174mn, net loss: JPY178mn, attributed to higher-than-expected profits in Spot and Power Production businesses.
• Installed capacity under O&M contracts: 2,218.0MW, company-owned solar power plants in Japan (non-FIT/FIP): 22.0MW, overseas: 52.8MW.