Long-term potential as Phnom Penh Water Supply Authority (CSX:PWSA) invests in largescale facility

Long-term potential as Phnom Penh Water Supply Authority (CSX:PWSA) invests in largescale facility

Phnom Penh Water Supply Authority (CSX: PWSA) is looking too long term production
growth as the Company broke ground on a master plan for supplying sufficient potable
water to the capital region by 2030.

PWSA has faced a sharp increase in the demand for potable water since 2010. This
the increase is attributed to the rise in construction activities of high-rise buildings as well as
the increase in population.

According to a disclosure document submitted to CSX yesterday, “In order to maintain
its coverage of water demand and expand its service area to 100% percent of the city.
PPWSA prepared its third Master Plan for the period 2016-2030. The Master Plan defined
an ambitious investment program of $500 million aimed at almost doubling again the
production capacity.”

Most of the project’s funding has been given at concessional rates from organizations
such as Agence Francaise de Developpement and European Investment Bank.
More information on the project can be found here: Khmer Times

PWSA was the first stock to list on the exchange in 2012 however has not yet managed to
improve on its IPO at 6,300 riels per share. FY2019 share dividend distribution was
announced at 230 riels a share (3.65% of IPO).

Speaking to local media yesterday, Cambodia Securities Exchange Vice-President Ha
Jong-weon said the new investment will give PWSA new potential for growth, noting that
the current price of its shares is rather undervalued.

“What is special is that most of the investment projects are funded at very low-interest
rates. This will help this state-owned enterprise with new growth in its business. I am sure
that its stock price will increase soon, reflecting the new investments soon,” he said.
Providing a dividend yield of four per cent or more per year, Ha asserted that PWSA is a
growth stock for long-term investment and that its shares trade relatively well.
Substantial shareholders (holding ≥5% of listed shares) of the stock is the Ministry of
Economy and Finance with 85%.

In the third quarter of 2020, PPWSA generated revenues amounting to KHR
86,585,071,000 increased by KHR 22,653,872,000 or 35.43% quarter on quarter and
profit for the financial period amounting to KHR 27,140,842,000 increased by KHR
5,472,963,000 or 25.26% quarter on quarter.

For the nine-month period ended 30 September 2020, PPWSA generated revenues
amounting to KHR 237,483,728,000 increased by KHR 61,218,230,000 or 34.73% quarter
on quarter and profit amounting to KHR 69,566,035,000 increased by KHR
30,241,689,000 or 76.90% compared to the nine-month period ended 30 September
2019.

As at 30 September 2020, PPWSA has total assets of KHR 1.785.226.529.000 increased
by KHR 180,882,607,000 or 11.27% and total equity of KHR 963,266,847,000 increased by
KHR 49,562,208,000 or 5.42%.

The Company currently has a low 8.34 Price to Earnings ratio.

PWSA was trading at down at 6,000 riels a share at 12:45PM Indochina. Cambodia Investment Review