re: Pacific Hydro - Any thoughts, page-3

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    re: Pacific Hydro - Any thoughts If there is a single thing you have pointed out Greg, it is a lack of appreciation of this company by the average punter. PHY is clearly the market leader in renewable energy, wind generation and hydro plants make up most of the repertoire at the present. As to a possible capital raising, what a lot of rot. PHY are fully funded for every project they have, the wind energy deveopments derive a gross margin in the order of 70%, this is a very big cash cow company in the making. Earnings reported earlier in the year are up 37% on the previous period and the company is expected to grow by a factor of seven in the next few years.
    Added to this, they have defined more than 100 high quality sites within the Australian continent where they want to build wind farms, this represents more than $5b in infrastructure. Additionally, they have targeted sites all around the Pacific rim, including the west coast of the USA. One of the largest shareholders which will apply a proactive role in the pacific rim is American Electric Power, the largest energy generator in the US. AEP recently appointed a new director to the board of PHY for this very purpose.
    At the present time PHY have to be the most underated stock on the market, thay are trading on a PE of less than 12, have real earnings, have present and future debt well covered and already own the largest wind farm in the country. This farm is about to be dwarfed in size by two new farms of vastly bigger capacity when the PWEP gains approval in the next few weeks.

    As to selling off their NZ asset, it was a chicken feed size with a small audience compared to what they have in mind here. As to competition, lets see, Stanwell they are about the biggest, they have their main project in QLD, it is a midget compared to the existing PHY plant at Codrington. And now Stanwell are waiting on PHY to get local manufacturing up and running so they can buy local generators more cheaply than imports, PHY expect their saving per unit is around $90000. Stanwell and any other contenters are just going to have to get in line because NEG Micon are contracted to supply 400 generators to PHY within a time frame.
    These other contenders are merely jumping on a PHY bandwagon because they know Australia is now locked into a global commitment for renewables, and that commitment % will grow. Make no bones about it, no contender for this business could hold a candle to PHY, they are a clear market leader in this field, and will stay that way. This company is blue chip in the making, the sheer number of brokers following the progress of the PWEP and imminent government approval tells the story. Retail investors in the market can only own 20% of the company, the rest(80%)is owned by the top twenty shareholders such as American Electric Power - it is no wonder why they got to be the biggest in the USA finding growth opportunites such as PHY. AEP have a strong portfolio of global investments, PHY is one they have had since 1998.

 
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