Myanmar Thaketa natural gas power generation project was put into operation on 14 June as scheduled following the commercial operation of the company's power generation project in Kyun Chaung, Myanmar, on June 3, the first Myanmar natural gas power generation project, which is 50-50 owned by Werneng Group and China Technology Import and Export Corporation ("China Technology Corporation"), was also put into operation in phases starting from 14 June as scheduled. The project, located in Thaketa, Myanmar, has a total installed capacity of 477.1 megawatts. The company earlier signed a power purchase agreement with Electric Power Generation Enterprise, a subsidiary of Myanmar's Ministry of electricity and Energy, on June 10, with an initial contract period of 60 months. The project is also Myanmar's first liquefied natural gas power generation project.
Electricity purchase agreements for two other joint venture projects will also be signed within this month. The company expects to sign electricity purchase agreements for two other Myanmar projects also with SinoTech within this month. The two natural gas power generation projects are located in Thanlyin and Kyuak Phyu with a total installed capacity of 410.2 megawatts and 172.2 megawatts, respectively. We believe that the project will also be put into operation shortly after the signing of the electricity purchase agreement.
The "Belt and Road Initiative" initiative is a good example; the company's sustainable expansion of the project is a good example of the "Belt and Road Initiative" initiative. We are confident that the company will be able to obtain new projects in countries along Belt and Road Initiative in the future.
Reiterate the "buy" rating and target price of HK $5.30; do not rule out the possibility of future valuation increases we maintain earnings forecasts, and accordingly maintain the target price projected by discounted cash flow analysis at HK $5.30, which corresponds to 12.6 times 2021 price-to-earnings ratio and 33.2% room for growth. Reiterate the "buy" rating. With the launch of all three joint venture projects, we will re-examine the risk premium assumption for the company to reflect that its operating risk may be lower than we originally expected, and do not rule out the possibility of future valuation increases.
Risk hints: (1) delays in project development; (2) tight supply of natural gas; (3) policy risks; and (4) slowdown in electricity demand.