ISDN

ISDN: SIAS cited that the recent developments that ISDN undergone places the group ahead of its 2014 goal. In brief, the acquisition of 80% shareholding in three Indonesian companies for its hydroelectric business in Sumatra, the hydropower plant in Sulawesi and the warrant issue. The group's recent developments in Indonesia may generate a total theoretical profit of about $42.8m annually, which will be a substantial boost to the company’s profitability. Whilst ISDN’s outlook seems promising, especially with the sizeable projects, SIAS caution that the projects are currently undergoing feasibility studies and the valuation may change if ISDN decides not to proceed with them. Also, there is project execution risk and concern over the speed of land acquisition. SIAS apply a SOTP to value ISDN; The hydroelectric segment is valued at 11X FY15F profit while the Myanmar projects have a prospective value-add of $50m (based on 5% probability of a $1b estimated value-add), ISDN's existing business on its book value of $89m, and deducting 40m for the additional financing needed for the new hydropower project.