Monday, June 10, 2013

Have A Good Look At Cypark Resources

The market has been focused on oil & gas, marginal oilfields, Iskandar plays and even Penang's Second Bridge plays. Running out of ideas? So are the analysts. Still, there are gems to be found, and one of them is in Renewable Energy, Cypark Resources.

Cypark Resources Berhad is a Malaysia-based company engaged in the provision of environmental technology and engineering solutions to both the private and public sectors. Its services include transforming neglected, degraded or contaminated land into sustainable and manageable fields. Its projects include the restoration of a disused mining land in Cyberpark, Cyberjaya, and the Taman Beringin Safe Landfill Restoration project in Kuala Lumpur. 

It has three segments: landscaping, which is engaged in the provision of landscape services for public parks, public amenities and other landscaping developments; maintenance, which is engaged in the provision of maintenance services for public parks, public amenities and other landscape developments, and environmental, which is engaged in the provision of nature conservation and environmental amelioration. In September 2011, it acquired Cypark Suria (Sua Betong) Sdn. Bhd., Cypark Suria (Kuala Sawah) Sdn. Bhd. and Cypark Suria (Bukit Palong) Sdn.



The company is pumping up the revenue platform, hence if you focused solely on reported numbers you may miss the bigger picture. 1Q13 revenue rose by 20.6% to RM51m due to the start of Cypark's solar farm in Pajam and higher revenue from its waste-to-energy projects. At the same time, total costs rose by 26.8% to RM39.7m as the company is aggressively putting up RE projects around Malaysia. Management aims to add 15MW of  RE capacity in FY13, mainly in 2H. This will increase Cypark's total RE capacity by 83% to 33MW by end-FY13. The higher start-up cost has offset Cypark's top-line growth, leading to a 6.4% decline in EBIT to  RM10.1m.

The stock could be catalysed by the successful rollout of new renewable energy (RE) projects and signing of the Ladang Tanah Merah landfill concession. In addition to its MoU in Myanmar, Cypark can replicate its 
RE model in other Asean countries such as Thailand, which already has a feed-in-tariff mechanism in place.


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4 comments:

Black Ink said...

Didn't realise Malaysia even had feed-in tarrifs.

What this company is doing and the work it is undertaking is admirable. Malaysia needs this. Badly. But, as an investor, I need some answers to the following;

1) What engineering experience/background do any of the BoD have?

2) Have any of the senior management worked on such projects before, on an international level?

Some of the work they undertake requires very specialised, highly skilled engineers.

4) Malaysia does not currently have pioneering experts in this area, so who are their JV partners, if any?

5) Who's or what Intellectual Property are they using, and how much does it cost?

6) Why would any country use these guys of they have no prior experience, and are not JV-ing with Japanese or German experts?

Last but not least;

Where are they going to get contracts from if not from Najib's UMNO, and other government largesse?

bsngpg said...

Black Ink, thanks for the good Qs. I worked in technical field for the last 20 yrs, and I knew that "Ali" is by and large culturally not that competitive in technical field which Cypark is in. So I have less confident on the BoD with all "Ali". If I see some name such as "David", "Moorthy" , "Tan" or “Tanaka”, I will have higher confident on the company’s long term competitiveness and success.
Dali : I wish to read your view or bombardment on this as I like the business model but lack confident on all “Ali”. Thks

bsngpg said...

Black Ink, thanks for the good Qs. I worked in technical field for the last 20 yrs, and I knew that "Ali" is by and large culturally not that competitive in technical field which Cypark is in. So I have less confident on the BoD with all "Ali". If I see some name such as "David", "Moorthy" , "Tan" or “Tanaka”, I will have higher confident on the company’s long term competitiveness and success.
Dali : I wish to read your view or bombardment on this as I like the business model but lack confident on all “Ali”. Thks

IR Dinesh Menon said...

This company has only projected values and also full of ill managed team above , this company does not engage in any business development or any kind of progressive interest of development in any long return.

This company was approached by an outside project investors for the development of a confidential solar park of RM 750 million and they refuse to embark on the project knowing that it has poor cash flow and always made headlines for the wrong reasons.