Kengen. The company IPO’d in 2006 with the government offering 30% of its shareholding to the public. The IPO was historic with Kenyans literally queuing in the streets of Nairobi to apply to buy the shares. Upon announcement of the IPO results, it turned out that the IPO had been oversubscribed by a staggering 236% and Kenyans made a killing, with some lucky ones making up to 5 times on their initial investment. The share has since settled and is now trading at KES 8.65 (as of Monday 14th May 2012), far from the highs it registered in 2006. In the last year, the Kengen share has hovered between KES 6.80 and KES 15.90.
We at Pesatalk believe the share remains a good investment. The share is undervalued, with 100+ percent potential for returns. To support this anticipated increase in the share price are expected returns from investments in geothermal power plants such as the 280 megawatt Olkaria IV geothermal plant (which will be the largest geothermal plant yet) in 2014. Before then, Kengen expects to complete the Horizon I projects that in total will supply 500 megawatts of power to the national grid. Horizon II is a six year project that commenced in 2012 and is expected to deliver 2000 megawatts to the national grid upon completion. Basically, the future looks bright for the company with
Below is a graph showing Kengen’s share movements in the last year. If you ask us, we’d say Kengen is a a good mid/long term buy.
