KUALA LUMPUR (Sept 17): Shares in Mega First Corp Bhd soared 19 sen or 9.22% to as high as RM2.25 today on news that it has secured a power plant project in Laos worth RM2.15 billion.

At 2.53pm, Mega First narrowed its gains to trade at RM2.22, still up 16 sen or 7.77%, making it one of the top gainers across the bourse.

Some 92,000 shares changed hands between RM2.12 and RM2.25.

Year-to-date, the group has declined 16 sen or 6.67%, underperforming the FBM KLCI's 4.6% lost.

On Tuesday, the group said its 80%-owned indirect subsidiary Don Sahong Power Company Ltd has inked a concession agreement with the Government of The Laos People's Democratic Republic, to develop the US$500 million (RM2.15 billion) 260MW Dan Sahong Hydropower Project.

The project will be in the Hou Sahong Channel of the Mekong River, in Champasak Province, Loas, and is a 260MW run-of-river hydropower project that is capable of generating about 2,000GWh of electricity per year. It is expected to achieve commercial operation in early 2020 and came with a 25-year concession period.

In a note to clients today, Public Investment Bank Bhd (PIVB) expects the hydropower project to generate an annual revenue of US$120 million (RM516 million) or nearly double its current annual revenue once commercial operation begins.

"It could potentially boost our sum of parts (SOP)-based valuation by at least RM1.

"In addition, it will also help ease the concern of not being able to renew its power purchase agreement for its power plants in Sabah and China, which will expire in 2017 and 2022 respectively," said PIVB.

The firm noted that Mega First has spent some RM57 million to date to conduct a feasibility study on the project as well as construct basic infrastructures such as access roads and a bridge to the site.

PIVB has an "outperform" call on Mega First with an unchanged target price of RM3.14.

(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.)