Timah Resources (ASX: TML) – Malaysia biogas renewable

 

ABOUT COMPANY

Timah Resources (TML) (https://www.timahresources.com.au/) operates a Biogas Renewable Energy Plant in Malaysia with nominal export capacity of up to 3.5 Megawatt. The Plant uses Palm Oil Mill Effluent (POME) to produce Methane Gas, which is then used as fuel to run Gas Engines to generate green and renewable energy, it then sells back to the national grid under the new Feed–in Tariff (FiT) Programme Renewable Energy Power Purchase Agreement for RM0.4669 per KWh.

This is an interesting article about Malaysia biogas industry: https://www.hindawi.com/journals/ijce/2022/2278211/

In September 2022, the Malaysia government launched the National Energy Policy 2022 – 2040.

CAPITAL STRUCTURE

The company is largely owned by its parent company, Cepatwawasan Group Berhad, and the top 20 are all Maylasian. There are only about 7m shares tradable outside of the top 20.

For FY22 buy-back, out of 1m bought back, 700k shares bought from the Khoo family.

The loan balance has been further reduced to around AU$9m with the interest rate at 4.08% repayable on 31 December 2025.

BUSINESS

The company’s plant has 3.5MW working capacity (vs 120MW nationally in 2021), which equals about 30,660MWh (24 hrs x 365 days) at the rate of RM 0.4669KWh. Therefore, the normal revenue per year would have been RM$ 14m. With 20% down time, it should generate RM$11m revenue a year.

The company has a very minimal amount of expenditure.

SUMMARY

The company, as a shell, has a profitable business model, and its share price is backed by the Net Assets.

The company’s plant is one of the very few plants in production.

The company never had a run since its listing in 2015, and only has some 6m shares outside of the top 30, one day, it will get crazy.