Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

Global Power Synergy Company Ltd / Equity Bottom-Up

<ul><li>The share price has not yet reflected the strong earnings momentum expected in 2Q24E, nor fully priced in the weaker IU margin outlook for 2H24E (with a stable Ft in the final period and slightly higher gas costs HoH).</li><li>However, the key assumptions for 2024E remain within our projections.</li><li>We maintain our view that the 2024E earnings will recover YoY and that 2-year EPS growth will remain stable.</li></ul>

The share price has not yet reflected the strong earnings momentum expected in 2Q24E, nor fully priced in the weaker IU margin outlook for 2H24E (with a stable Ft in the final period and slightly higher gas costs HoH).However, the key assumptions for 2024E remain within our projections.We maintain our view that the 2024E earnings will recover YoY and that 2-year EPS growth will remain stable.

Global Power Synergy - Strong 2Q24E Earnings; Undemanding Valuation

Cross Asset Strategy

<ul><li>SPPs’ share prices may experience selling pressure in the short term due to three cases concerning electricity tariffs and Ft rates during the final period, as public hearings indicate a high likelihood of government intervention amid the current economic fragility.</li><li>If the electricity tariff and Ft rate in the final period are capped, there will be no downside risk to our 2024E forecasts.</li><li>However, if the electricity tariff and Ft price fall under Case (3), this could present upside risk to our 2024E earnings projections for BGRIM and GPSC, by around 6%. </li></ul>

SPPs’ share prices may experience selling pressure in the short term due to three cases concerning electricity tariffs and Ft rates during the final period, as public hearings indicate a high likelihood of government intervention amid the current economic fragility.If the electricity tariff and Ft rate in the final period are capped, there will be no downside risk to our 2024E forecasts.However, if the electricity tariff and Ft price fall under Case (3), this could present upside risk to our 2024E earnings projections for BGRIM and GPSC, by around 6%. 

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> is proposing to take 64.67%-held <a href="https://www.smartkarma.com/entities/sermsuk-pcl" target="_blank" data-smartkarma-citation="entities:15918:1" rel="noopener">Sermsuk PCL (SSC TB)</a>  private by way of a voluntary Delisting Offer.</li>
<li>T<a href="https://links.sgx.com/FileOpen/Tender_Offer_SSC_Shares.ashx?App=Announcement&amp;FileID=808724" target="_blank" rel="noopener">he Offer price is THB 63/share</a>, a 27.9% premium to last close.</li>
<li>This Delisting Offer requires a Scheme-like shareholder vote. Payment may occur late 4Q24. This is an illiquid arb.</li>
</ul>



Thai Beverage (THBEV SP) is proposing to take 64.67%-held Sermsuk PCL (SSC TB)  private by way of a voluntary Delisting Offer.
The Offer price is THB 63/share, a 27.9% premium to last close.
This Delisting Offer requires a Scheme-like shareholder vote. Payment may occur late 4Q24. This is an illiquid arb.


Sermsuk (SSC TB): THBEV's Delisting Offer

Thematic (Sector/Industry)

<ul><li>The share prices of the power sector may face pressure from the extended high-interest rate cycle, posing downside risk to expected project returns.</li><li>However, the current share prices have largely factored in this element, making the present valuation more attractive.</li><li>Meanwhile, the 2024-26E earnings growth of the power operators under our coverage remains solid. </li></ul>

The share prices of the power sector may face pressure from the extended high-interest rate cycle, posing downside risk to expected project returns.However, the current share prices have largely factored in this element, making the present valuation more attractive.Meanwhile, the 2024-26E earnings growth of the power operators under our coverage remains solid. 

<ul><li>The 1Q24 earnings improved QoQ, and the momentum will continue in the quarters ahead due to lower fuel costs and positive seasonal factors.</li><li>We maintain our 2024E NP and stand by our flat LT earnings outlook (2024-26E). Our Neutral rating (12M FV at Bt55.0) is also retained.</li><li>We expect power stocks, with high debt leverage, to be pressured by the extended high interest rate cycle. </li></ul>

The 1Q24 earnings improved QoQ, and the momentum will continue in the quarters ahead due to lower fuel costs and positive seasonal factors.We maintain our 2024E NP and stand by our flat LT earnings outlook (2024-26E). Our Neutral rating (12M FV at Bt55.0) is also retained.We expect power stocks, with high debt leverage, to be pressured by the extended high interest rate cycle. 

Global Power Synergy -In-Line 1Q24 Earnings; Strong Momentum Ahead

Thailand

Global Power Synergy Company Ltd. (GPSC) provides utilities services. The Company generates and distributes electricity, steam, and processed water. GPSC serves customers in Thailand.

Global Power Synergy Company Ltd (GPSC TB)

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Global Power Synergy Company Ltd (GPSC TB)

Global Power Synergy - Strong 2Q24E Earnings; Undemanding Valuation

The share price has not yet reflected the strong earnings momentum expected in 2Q24E, nor fully priced in the weaker IU margin outlook for 2H24E

Krungthai XSpring

Industry Update - Energy (Power)

SPPs’ share prices may experience selling pressure in the short term due to three cases concerning electricity tariffs and Ft rates during the...

Krungthai XSpring

Sermsuk (SSC TB): THBEV's Delisting Offer

This is done. The Offer Price is fair. Assuming completion early January 2025, I'd buy around THB 58.50, a 7% gross spread, or 15% annualised.

David Blennerhassett

Energy (Power) - MAY 30, 2024

The share prices of the power sector may face pressure from the extended high-interest rate cycle, posing downside risk to expected project returns.

Krungthai XSpring

Global Power Synergy -In-Line 1Q24 Earnings; Strong Momentum Ahead

The 1Q24 earnings improved QoQ, and the momentum will continue in the quarters ahead due to lower fuel costs and positive seasonal factors.

Krungthai XSpring

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