• ISDN (SGX:I07) started its foray into the mini-hydropower plant business in Indonesia around 2012-2013.
• Last week, ISDN announced that 2 of its mini-hydropower plants have been commissioned. The next step is to obtain permits for commercial operations.
• If successful, the mini-hydropower business could be EPS accretive for FY22F-23F. Spinning off this business is also a possibility.

2 Mini-hydropower Plants Commissioned

• ISDN’s hydropower plants in Anggoci (10MW capacity) and Sisira (4.6MW capacity) successfully passed commissioning last week and have been hooked to the municipal grid. These plants are in North Sumatra, Indonesia.
• The next step is for ISDN to obtain permits for full commercial operations, which it targets to achieve by end-2021.
• ISDN also said that the third mini-hydropower plant of 10MW capacity at Lau Biang continues to make good progress towards commissioning by the first half of 2022.

Additional Earnings Stream for FY22F-23F

• We have not held via its 67.1% owned subsidiary, AEnergy Holdings Company Limited (Not Listed).

Reiterate ADD Rating on ISDN

• At 12.6x Singapore tech sector CY22 average P/E (unchanged), our target price for ISDN remains at S$0.85.

• A potential re-rating is a prolonged COVID-19 outbreak.

Source: CGS-CIMB Research - 13 Sep 2021