KUALA LUMPUR (May 18): AmCorp Properties Bhd (AmProp), which is controlled by veteran banker Tan Sri Azman Hashim with a 70.65% stake, announced today its two wholly-owned units — Contour Mechanism Sdn Bhd and Trident Cartel Sdn Bhd — have signed a 21-year renewable energy power purchase agreement (REPPA) with Tenaga Nasional Bhd (TNB).

In a filing with Bursa Malaysia, AmProp (fundamental: 2.4; valuation: 2.1) said it will build and operate two renewable energy mini-hydro power plants, located at Sg Liang, Raub, Pahang, with a capacity of 10MW each, under the agreement.

AmProp expects the construction of the plants to take some 24 months.

“Thereafter, under the terms of the REPPA, TNB shall purchase the electricity generated from Contour Mechanism’s and Trident Cartel’s mini-hydro power plant for a concession period of 21 years. The total estimated generation and value of renewable energy generated, is approximately 85.42GW hour and RM20.5 million per year respectively,” AmProp said.

Currently, AmProp’s wholly-owned unit Amcorp Power Sdn Bhd has a 100% stake in Affluent Merger Sdn Bhd, which in turn owns Contour Mechanism and Trident Cartel.

Following the signing of the agreement, TNB will acquire a 49% equity interest in Affluent Merger, which will reduce AmProp’s effective stake to 51%.

AmProp currently operates a 4MW mini-hydro power plant in Bentong, Pahang, and a 10.25MW Solar Power Plant in Gemas, Negri Sembilan.

In the financial year ended March 31, 2014 (FY14), AmProp’s contracting, renewable energy and power generation business contributes 56% to its overall revenue and 4% to its pre-tax profit.

AmProp had seen its shares rally 34.62%, from 78 sen on March 27 to RM1.05 on April 17. The stock had since eased to close 0.5% higher from last Friday (may 15)’s close, at RM1 today, valuing it at RM586.87 million.

Year-to-date, AmProp shares has appreciated by 25 sen or 33.33%.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)