General Electric Company’s (NYSE:GE) Power Services business today announced it signed a multiyear agreement (MYA) with Southern Power Generation Sdn Bhd (SPG) for its new Track 4A plant, a 1,440-megawatt (MW) combined-cycle power plant in Pasir Gudang, Johor, Malaysia. Under the terms of the 21-year agreement, GE will provide services solutions for the first two GE 9HA.02 gas turbines to be installed in the country and deploy its Predix* Asset Performance Management (APM) software to help improve asset visibility, reliability and availability of SPG’s plant, contributing to long-term energy security needs in the country.
GE will utilize its Fleet360* platform of gas plant solutions. Under the terms of the agreement, GE will provide a full spectrum of digital solutions and plant improvement services, major inspections on the 9HA.02 gas turbines, along with technical advisory services.
“With the largest base of installed gas turbines in Malaysia, GE has grown hand in hand with the country’s power development needs,” said Ramesh Singaram, president of GE Power APAC. “We have been doing business in the country for more than 40 years and will continue to help drive improved efficiencies and business outcomes for our customers like Southern Power Generation. I am pleased that our combined services and digital capabilities will help support long-term maintenance and performance for the first HA-based power plant in the country, ensuring more reliable and flexible power generation for the country. We thank Southern Power Generation for their trust in GE.”
The agreement also includes GE’s Predix APM suite of digital solutions. APM improves asset visibility, reliability and availability and reduces operating and maintenance costs: data processed by the APM solution can help balance maintenance costs, improve inspection intervals and provide invaluable insights into operational risks. Data collected from sensors throughout the facility will be monitored 24/7 at GE’s Monitoring & Diagnostics (M&D) Center in Kuala Lumpur.
The services deal follows the success of achieving the financial closure for the engineering, procurement and construction (EPC) contract with SPG in October 2017, marking the growing fleet of GE’s largest gas turbine platform to a total of over 70 units of the HA-platform gas turbines ordered to date. This plant will be jointly constructed through the collaboration with a Taiwanese EPC partner, CTCI Corporation. It will consist of two generating blocks, each equipped with a 9HA.02 gas turbine, generator and heat recovery steam generator from GE. GE has invested almost $2 billion in the development of HA technology. HA power plants provide a combination of high efficiency and superior operational flexibility, leading the industry in total life cycle value. Globally, a total of more than 20 units of HA are running in the field, clocking in more than 70,000 operating hours with an average combined-cycle net efficiency of greater than 62 percent at ISO conditions.
Shares of General Electric closed today at $13.64, down $0.43 or -3.06%. GE has a 1-year high of $30.54 and a 1-year low of $13.62. The stock’s 50-day moving average is $14.81 and its 200-day moving average is $18.96.
On the ratings front, General Electric stock has been the subject of a number of recent research reports. In a report issued on March 13, J.P. Morgan analyst Stephen Tusa maintained a Sell rating on GE, with a price target of $11, which reflects a potential downside of -19% from last closing price. Similiarly, on March 7, Deutsche Bank’s John G. Inch maintained a Sell rating on the stock and has a price target of $13.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Stephen Tusa and John G. Inch have a yearly average return of 9.5% and 13.6% respectively. Tusa has a success rate of 75% and is ranked #652 out of 4778 analysts, while Inch has a success rate of 80% and is ranked #689.
Overall, 3 research analysts have rated the stock with a Sell rating, 9 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $15.90 which is 17% above where the stock closed today.