ISDN Holdings - CGS-CIMB Research 2023-01-04: First 10MW Hydropower Plant Obtains Commercial Operation Date

ISDN Holdings - First 10MW Hydropower Plant Obtains Commercial Operation Date

  • ISDN announced on 3 Jan 2023 that its first mini hydropower plant, Lau Biang 1 (10MW capacity), has received the commercial operation date (COD) as of 31 Dec 2022. In its public filing, ISDN (SGX:I07) also commented that it expects meaningful contributions from this plant for FY23F.
  • In China, there are two positive developments for ISDN.
    • First, China is now shifting its focus to the economy after three years of prioritising the management of the COVID-19 pandemic.
    • Second, starting 8 Jan 2023, China will also downgrade COVID-19 to a Class B infection and largely eliminate quarantine and movement control measures. This will allow further resumption of business activities in China though there will be an impact from the initial wave of infections as restrictions are dismantled which could affect activities.
  • We expect sequential improvement for ISDN starting from 2Q23F. Pending updates from ISDN through a planned investor briefing as publicly announced by the company, we interpret meaningful contribution to mean 5- 10% of net profit and assume that Lau Biang 1 could add an incremental 10% to our FY23-24F net profit forecasts for ISDN. Hence, our FY23-24F EPS forecasts for ISDN are raised by 11.1%. Rolling over to FY24F, our target price for ISDN increases to S$0.55 based on 8.9x (5-year average P/E multiple). Previously the 5-year average P/E multiple was 8.6x.
  • We upgrade ISDN to an ADD as its hydropower earnings commence contribution to its bottomline and business prospects improve from 2Q23F.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

William TNG CFA CGS-CIMB Research | Izabella TAN CGS-CIMB Research | 2023-01-04

Read also CGS-CIMB's most recent report:
2023-01-13 ISDN Holdings - Assuming Anggoci COD (Commercial Operation Date).

Price targets by other brokers at ISDN Target Prices.
Listing of research reports at ISDN Analyst Reports.

Relevant links:
ISDN Share Price History,
ISDN Announcements,
ISDN Dividends & Corporate Actions,
ISDN News Articles

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