I am obliged to inform you that Ranhill is my major investment. I am not asking you to buy to support the share price. If you decide to buy, I am not responsible for your loss or profit. My purpose for writing this article is to share what I know about the company.
Electricity started in Sabah as early as 1910 supplied by 3 separate organisations. In 1957 these three organisations combined to form North Borneo Electricity Board. Upon the formation of Malaysia in 1963, it was renamed Sabah Electricity Board. On 1 September 1998, Sabah Electricity Board was privatised and became Sabah Electricity Sdn. Bhd. (SESB)
The total generation capacity of SESB is 866.4 MW, 50.3% of the total units generated are purchased from the independent power producers (IPP). Currently Ranhill is the biggest IPP. It has 2 unit of 190 MW, totaling 380 MW generating electricity for sale to SESB.
On 3rd April Ranhill made a long legally worded announcement about the Sabah State Government’s award of a contract to construct a 100 MW gas power plant to sell/supply electricity to Sabah Energy Corporation for 21 years. The price of electricity will be based on cost plus profit. Currently Ranhill has 2 units of 190 MW totaling 380 MW gas power plant in operation and with this additional 100 MW, the company will have 480 MW gas power plant generating electricity to sell to SESB.
That simple means Ranhill has additional profit growth for 21 years. Among all the share section criteria such as NTA, cash flow, debt, health balance sheet, EPS etc the most powerful criterion to push up share price is profit growth prospect. That is why Ranhill share price has been going up higher and higher. You can see Ranhill share price chart below:
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