The Weineng Group completed a new placement of 83 million shares on July 23 at a price of HK $3.75 per share. The performance of the stock price weakened after the placement. We believe that the overall impact of the placement on the company is very limited, because the placement only dilutes earnings per share by 3.2%, which is almost negligible compared to the company's net profit of 150.6% in fiscal year 2020, compared with 64.5% in fiscal 21. For the Myanmar joint venture project, we made a further calculation of the joint venture project after it was put into production one after another. Based on the current spot price of LNG, we believe that the profit of this joint venture project of Weineng is confident, and we think that the profit performance can be climbed to another high-rise building under better fuel cost control. We maintain a confident buy rating for the company and slightly lower the target price to HK $5.47 per share to reflect the dilution of earnings from the placing.
The impact of placement is negligible. Wyneng completed a new placement of 83 million shares on July 23. The placing price is HK $3.75 per share, a 13 per cent discount to the pre-placing closing price. After deducting fees, the company raised a net HK $299 million through the placement, which we estimate will help the company reduce its net debt ratio from 112.7% in 2019 to 81.8% in 2020. The share price experienced a sharp pullback after the placement, reflecting market concerns about the company and the placement. We believe that the market has overreacted to this, as this placement brings only 3.2% dilution, and we believe that the placement will help to eliminate the risk of further dilution in the second half of the year.
A close view of the Myanmar joint venture project. We continue to focus on the company's iconic joint venture in Myanmar. We expect the total investment of the joint venture project to exceed HK $5.5 billion for a total installed capacity of 1.06GW. According to the Burmese Times, the electricity price of the joint venture project is about $0.12 per kilowatt-hour. Under our benchmark conditions, we believe that the internal rate of return of the joint venture project is more than 20%, which is better than the IBO project currently held by Weineng. The main exposures of the project focus on 1) LNG cost, 2) capacity utilization, and 3) energy efficiency indicators of joint venture generating units. We believe that the company will have a good chance to further improve the profitability of the project through reasonable control of the above three items.
Favorable LNG market environment. We believe that the company has seized the favorable market opportunity to expand LNG-fueled distributed power generation projects. LNG spot market prices in Asia are at a three-year low, while JKM futures are trading at just $2.60 per million MMBtu, according to Bloomberg data. We believe that an adequate supply of LNG will make it easier for the company to achieve fuel cost control, while the large scale of fuel demand will give the company a strong say in the buyer's market environment.
Reiterate a high degree of confidence in buying. We are confident that the company will achieve high profit growth in 2020. For the 2020-22 earnings per share forecast, we slightly downgrade 2.0-2.6% to reflect the impact of equity dilution. Our target price for the company's DCF has been slightly reduced to HK $5.47 per share.