IPO @ Rs30.02/sh |Buy |Commendable
Engro Powergen
Qadirpur Limited was incorporated in Pakistan on February 28, 2006. The company
completed construction and testing of its 217.2 MW(net) combined cycle power
plant and commenced commercial operations on March 27, 2010.
Plant details
The
company has set up a 217.2 MW (net)
gas based thermal power project near Qadirpur,
District Gothki, Sindh.
Company
is using permeate gas as its primary fuel source and HSD as the startup and
backup fuel. Permeate gas is a by-product of gas purification process earlier
this gas was flared but EPQL makes it worthy and that allow EPQL to obtain an
edge among other thermal based power plants.
The
plant is a combine cycle plant with one gas turbine, one heat recovery steam
generator and one steam turbine.
Gas Supply ~ 75MMCFD |SNGPL
Company will be
receiving 75MMCFD permeate gas from Qadirpur gas field while gas supply
contract is with Sui Northern Gas Pipeline Limited (SNGPL).
Exemption ~ Entity to enjoy
Income of the
company derived from the electric power generation project is exempted from
Income Tax while same goes for deferred taxation hence no provisioning could be
taken for deferred taxation.
Key Points ~ EPQL
Use permeate gas for
operations while HSD will be used for start up and backup purpose
Exemption from Income
tax under clause 132 of Part-1 of the Second Schedule to the Income tax
ordinance, 2001.
- Total Paid up capital 323.8 mn
- Free Float 12.5% (40.475 mn)
- Total Project cost USD 194 mn
- Project life 25 years (21 remaining)Engro Powergen ~ Sindh Engro Coal mining company is working to mine coal from Thar (Block ll) and is developing 660 MW coal based power project.
- Gas Supply ~ 75MMCFD with SNGPL
Why Offer for
Sale?
- To pay off conventional liabilities
- To finance new project such as LNG terminal
Valuation | IPO @ Rs30.02/sh | HY14
EPS Rs3.36 | Interim DPS 1.54 |
We show positive
stance on Engro Powergen Qadirpur Limited (EPQL).
Currently entity is
in a good position and healthy margins alongwith distribution make the company
more viable. Annualized expected PE @ Rs30.02 is 4.46x.
We expect company to
perform better in future as this is the only plant which is generating power from
permeate gas and that allow the company to generate electricity at lower cost
among other thermal based plants.
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