vaiability of biodiesel Hi nUmbaz/TheAnlyazerFinally I have time...

vaiability of biodiesel Hi nUmbaz/TheAnlyazer

Finally I have time today to analyse JPR after 2 months of briefly following its sp. I hold no share.

You guys are right - this IPO should be underwritten but as nUMbaz stated it will be not as the project risk is too high !

NPAT/Revenue is only approx. 13% - this is too low and considering it has the support of the Malaysia Govt's Pioneer Tax Status (ie. no tax payable for the 1st 5 yrs of its operations). Plus, should the company's hedging startegies is wrong on any of the below mentioned risk factors, then the project's NPAT is screwed. Imagine what would happened if the Pioneer Status is gone !

This project is more suited for the palm oil planatation owners cum producers wanting to get rid of excess supplies of oils (crude or refined) in the market to maintain its pricing.

There are too many risk factors of this project ie. raw materials' pricing risk (ie. crude or refined palm oil, or methanol etc); exchange risk; end product pricing risk; production risk; etc just to name a few. However, on the contrary, supplies od crude or refined palm oil is not a problem as Malaysia is the leading suppliers.

Despite this project is well located in Kauntan, Malaysia - basically very near to its sources of suppliers and shipment facility - I would have thought this project would have commanded a higher NPAT returns - 13% is too low for my likely.

The Malaysain Govt is loving this project for reason that it will consume a good level of palm oil supplies, which in turn, will support the pricings of this commodities (crude, or refined). Crude/refined palm oil is one of Malaysia's leading export earner - so there is a national interest involved here in my opinion - thus, project will be closely watch by many corporations, and the govt.

If this project performed well, it is definitely be a take-over target by planatation owners cum refiners Groups (quite a few of these large conglomerate groups in Malaysia - this project cost of A$75k is peanuts to them !!!) - so, watchout in the future, provided it can get off the ground and can perform !!!

For this company to be successful, it must have a very experience/strong mgmt team in finance - basically, they need to hegde almost everythings ie. what's comes in and what's go out + strategy in shipment costs.

Good luck to all JPR shareholders.

This is strictly my own opinion (per my experience as a syndicate banker), and any readers/posters have the right to disagree.