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Great Hor Kham expands into hydropower, prepares for YSX listing

U Sai Ohn Myint, chair of the board of directors of Great Hor Kham Public Company, which will list on the Yangon Stock Exchange this year, isn’t too worried about trading volumes on the local bourse, which have all but collapsed since opening for business in early 2016.

“I think investors will be able to gauge the real market value of a stock after reviewing the annual reports and other data,” he said.

There is also a lack of depth to equity markets in Myanmar. “There are only a few investors in the YSX. When the number of investors rises, trade volumes will improve and listed companies will benefit from deeper capital markets,” he added.

Great Hor Kham, a local construction and infrastructure company, is expanding into the hydropower sector under a Build-Operate-Transfer (BOT) arrangement with the government and plans to list on the YSX this year.

There are currently five listed companies on the exchange and trading volumes have weakened substantially. In a recent interview with The Myanmar Times, U Sai Ohn Myint discussed his growth plans for Great Hor Kham as well as views on the outlook for the YSX. Here is an excerpt of the interview:

When do you expect shares of the company to begin trading?

We have been trying to be a listed firm for two years. This month, we will sign an agreement with the government on the BOT arrangement, following which we will submit the company’s prospectus to Securities and Exchange Commission of Myanmar. We expect to become a listed company by August or September this year.

We were established as a public company in 2012 and now have around 7 billion existing shares and 620 shareholders.

What are the investment merits of your company?

We will be signing a 50-year power purchase agreement under which the government has committed to purchasing a fixed amount of electricity from our facility whether it is needed or not so from a demand point of view, there should not be any concerns.

On the flip side, if we cannot produce the agreed amount of electricity, we will have to pay compensation to the government. Both sides will sign only after considering all possible risks.

The other point is that the cost to operate a hydropower plant is low, at around just 5pc of total income. This will appeal to investors.

Tell us more about the hydropower project you will be investing in.

Great Hor Kham will be investing in the Nam Paw hydropower project located near Muse under 50-year BOT arrangement with the government and options to extend for a maximum of 20 years. The project was approved by the Myanmar Investment Commission in May, 2017.

This May, we will sign the power purchase agreement with the government. Total investments in the project is estimated at around $40 million. However, further detailed calculations show that costs may be lesser than previously estimated.

We have also taken care of the costs associated with land compensation, project design and building infrastructure such as roads, power stations and bridges.

Has the project reached the stage at which it can produce electricity?

The main power generation plant has not been built so far.As we are planning to finalise this project within 2.5-3 years, it is estimated that electricity can be sold at the end of 2021.

At what price will electricity be sold to the government?

We will sign the power purchase agreement in May and announce the price afterwards.

Aside from energy, what are the plans for Great Hor Kham’s other businesses?

We will continue accepting construction projects from the government and private sector, which is where the company receives regular income. We will also continue to produce and sell sand, cement and construction materials. Separately, the board of directors has also approved a decision for the company to trade paddy and corn in Muse.

In the future, we have plans to invest in three more hydropower projects, one hotel, shopping center and housing development project. The details are still being discussed.

Source: Myanmar Times

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