"Construction of the Don Sahong hydropower project has reached 79%-80% as of Dec-2018," said PublicInvest in its Monday research note.
It said the turbines are expected to generate water flows at a rate of 600 cu meter/second with an average utilization rate of 89%-90%, which is one of the highest levels in the world.
Upon commercial operation, the four turbines are expected to generate an annual electricity production of 1,825GWh or 5,000MW/day and will be sold to Electricite Du Laos (EDL) for domestic consumption while excess electricity supplies will be sold to Cambodia.
"EDL will pay Don Sahong according to the energy availability and the payments are guaranteed by the Laos Ministry of Finance.
"It is worth noting that the company will see a one-off lucrative gain (not included in our FY19 earnings forecasts) during the 6-month energy testing period as energy generated will be sold directly to EDL.
"Based on our earnings estimates, the hydropower project will contribute annual sales of RM400m-RM450m and profit of RM200m-260m during the 25 years of concession."
For Mega First's limestone business, PublicInvest research said it will continue to see margin pressures due to a slowdown in economic activities and a weakening US dollar.
"Nevertheless, the increased production capacity by 400mt/day to 1,960mt/day following the recent completion of kiln 8 in Gopeng, will help buffer the earnings pressure by lifting sales volumes."
The research house maintained its outperform call on the counter with an unchanged target price of RM4.74.
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