Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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Thai Equity - Bottom-up - Equities

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Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

Global Power Synergy Company Ltd / Equity Bottom-Up

<p><strong>We maintain the BUY recommendation, while  revise up the target price by 7% to Bt95.0, incorporating the Bt6.0/sh contribution from investment in Avaada Energy (India). Our valuation is derived using DCF methodology (WACC of 5.3% and TG 1%), implying 30x PE’22E.</strong></p><div>• GPSC announced investment of Bt30bn in overseas renewable energy projects, including Bt15bn for 41.65 stake in Avaada energy India (1.6GWe) and another Bt15bn for 25% stake in Ci Changfang &amp; Ci Xidao Taiwan (149MWe).</div><div></div><div>• Net positive view on the investment as both the projects deliver an EIRR above 8% (GPSC’s average). We include the contribution of Bt6.0/sh from Avaada to our valuation, while Bt2.5/sh from Taiwan project is left as an upside due to late deal closure (2Q22)</div>

We maintain the BUY recommendation, while  revise up the target price by 7% to Bt95.0, incorporating the Bt6.0/sh contribution from investment in Avaada Energy (India). Our valuation is derived using DCF methodology (WACC of 5.3% and TG 1%), implying 30x PE’22E.• GPSC announced investment of Bt30bn in overseas renewable energy projects, including Bt15bn for 41.65 stake in Avaada energy India (1.6GWe) and another Bt15bn for 25% stake in Ci Changfang &amp; Ci Xidao Taiwan (149MWe).• Net positive view on the investment as both the projects deliver an EIRR above 8% (GPSC’s average). We include the contribution of Bt6.0/sh from Avaada to our valuation, while Bt2.5/sh from Taiwan project is left as an upside due to late deal closure (2Q22)

GPSC: 34% Capacity Expansion from New Overseas Investment

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY rating with a target price of Bt89.0, derived using DCF methodology (WACC of 4.5% and TG 1%). Our valuation implies 30x PE’22E.</strong></p><div>• Expect 2Q21 earnings to improve both YoY and QoQ, on the back seasonal better IPP operation (improving availability rate of GHECO-one and GIPP) and improved contribution from XPCL.</div><div></div><div>• Target selective growth by investing in renewable energy projects in India, Taiwan, Vietnam  etc. We estimate each 100MWe capacity expansion will bring Bt1.4/sh upside to GPSC.</div><div>•S-curve from new ESS business. 30MWh battery pilot plant set to COD in 2Q21.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY rating with a target price of Bt89.0, derived using DCF methodology (WACC of 4.5% and TG 1%). Our valuation implies 30x PE’22E.• Expect 2Q21 earnings to improve both YoY and QoQ, on the back seasonal better IPP operation (improving availability rate of GHECO-one and GIPP) and improved contribution from XPCL.• Target selective growth by investing in renewable energy projects in India, Taiwan, Vietnam  etc. We estimate each 100MWe capacity expansion will bring Bt1.4/sh upside to GPSC.•S-curve from new ESS business. 30MWh battery pilot plant set to COD in 2Q21.

GPSC: Overseas Expansion and ESS Business to Drive Growth

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY rating with a target price of Bt89.0, derived using DCF methodology (WACC of 4.5% and TG 1%). Our valuation implies 31x PE’21.</strong></p><div>• Expect 1Q21 earnings to remain flat both YoY &amp; QoQ.</div><div></div><div>• Positive 2021 earnings outlook as we expect a 9.0% YoY EPS growth on the back of Improving GPM from lower SPP gas cost, better XPCL contribution and escalating synergy benefits from GLOW,</div><div></div><div>• S-curve from new ESS business. 30MWh battery pilot plant set to COD in 2Q21.</div>

Last week analyst meeting came out in a positive tone. We maintain the BUY rating with a target price of Bt89.0, derived using DCF methodology (WACC of 4.5% and TG 1%). Our valuation implies 31x PE’21.• Expect 1Q21 earnings to remain flat both YoY &amp; QoQ.• Positive 2021 earnings outlook as we expect a 9.0% YoY EPS growth on the back of Improving GPM from lower SPP gas cost, better XPCL contribution and escalating synergy benefits from GLOW,• S-curve from new ESS business. 30MWh battery pilot plant set to COD in 2Q21.

Thematic (Sector/Industry)

<p><strong>BCPG, GUNKUL, GULF top pick growth stocks</strong></p><ul>
<li>
<strong>Earnings upcycle in 2021:</strong> We expect BCPG, GULF and GUNKUL to achieve 15 to 30% net profit growth during 2021 on the back 12 to 30% power generation capacity expansion in 2020-21 period.</li>
<li>
<strong>Declining gas price to support SPP performance:</strong> The industrial user power sales of SPP players BGRIM, GPSC and GULF (accounting 10 to 20% of the revenue) has rebound to pre – COVID 19 levels as of 4Q20.  We expect the declining gas cost (-10% YoY) will help in revamping the GPM and support the sector performance.</li>
</ul><p><strong>EGCO, RATCH top pick value stocks</strong></p><ul>
<li>
<strong>Cheap valuation:</strong> The stock price of EGCO and RATCH faced 70% and 30% fall in 2020 respectively. The stocks are trading very cheap at 9 to 13x PE’21E and having the companies already overcome the COVID-19 impact we believe the price correction has created an investment opportunity.</li>
<li>
<strong>Decent dividend yield:</strong> We expect RATCH and EGCO to pay a decent dividend yield of 3.3 to 4.4% in 2021.</li>
</ul><p><strong>Maintain HOLD rating on BGRIM, EA and GPSC</strong></p><ul><li>We have a positive view on BGRIM and GPSC as the SPP players will benefit from declining gas price. However, due to limit upside from current share price we maintain the HOLD rating. We recommend to HOLD EA, as the stock performance will depend on new EV-ESS business success and valuation demands.</li></ul>

BCPG, GUNKUL, GULF top pick growth stocks

Earnings upcycle in 2021: We expect BCPG, GULF and GUNKUL to achieve 15 to 30% net profit growth during 2021 on the back 12 to 30% power generation capacity expansion in 2020-21 period.

Declining gas price to support SPP performance: The industrial user power sales of SPP players BGRIM, GPSC and GULF (accounting 10 to 20% of the revenue) has rebound to pre – COVID 19 levels as of 4Q20.  We expect the declining gas cost (-10% YoY) will help in revamping the GPM and support the sector performance.
EGCO, RATCH top pick value stocks

Cheap valuation: The stock price of EGCO and RATCH faced 70% and 30% fall in 2020 respectively. The stocks are trading very cheap at 9 to 13x PE’21E and having the companies already overcome the COVID-19 impact we believe the price correction has created an investment opportunity.

Decent dividend yield: We expect RATCH and EGCO to pay a decent dividend yield of 3.3 to 4.4% in 2021.
Maintain HOLD rating on BGRIM, EA and GPSCWe have a positive view on BGRIM and GPSC as the SPP players will benefit from declining gas price. However, due to limit upside from current share price we maintain the HOLD rating. We recommend to HOLD EA, as the stock performance will depend on new EV-ESS business success and valuation demands.

Thailand Power Sector: Overweight-Bright 2021 Performance

<p><strong>Last week analyst meeting came out in a neutral tone. We maintain the BUY rating with 2020E target price of Bt89, derived using DCF methodology (WACC of 4.5% and TG 1%). Our valuation implies 37x PE’20.</strong></p><ul>
<li>3Q20 earnings is expected to grow YoY backed by improved earnings recognition from XPCL, better GPM of SPP’s from reducing gas cost and reduced finance cost. While, stay flat QoQ due to  lower IPP contribution.</li>
<li>SPP operation and sales to IU clients are expected to resume to pre-COVID-19 levels by 3Q20.</li>
<li>GPSC announced interim dividend payment of Bt0.5 per share from (Implying a yield of 0.8% based on current share price). XD is on 1st Sept 2020.  </li>
</ul>

Last week analyst meeting came out in a neutral tone. We maintain the BUY rating with 2020E target price of Bt89, derived using DCF methodology (WACC of 4.5% and TG 1%). Our valuation implies 37x PE’20.
3Q20 earnings is expected to grow YoY backed by improved earnings recognition from XPCL, better GPM of SPP’s from reducing gas cost and reduced finance cost. While, stay flat QoQ due to  lower IPP contribution.
SPP operation and sales to IU clients are expected to resume to pre-COVID-19 levels by 3Q20.
GPSC announced interim dividend payment of Bt0.5 per share from (Implying a yield of 0.8% based on current share price). XD is on 1st Sept 2020.  


GPSC: 3Q20 Earnings to Grow YoY While Remain Flat QoQ

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)

GPSC: 34% Capacity Expansion from New Overseas Investment

We maintain the BUY recommendation, while revise up the target price by 7% to Bt95.0, incorporating the Bt6.0/sh contribution from investment in...

Pi Securities PCL, Thailand

GPSC: Overseas Expansion and ESS Business to Drive Growth

Last week analyst meeting came out in a positive tone. We maintain the BUY rating with a target price of Bt89.0, derived using DCF methodology...

Pi Securities PCL, Thailand

GPSC: Eyes on New S-Curve ESS Business

Last week analyst meeting came out in a positive tone. We maintain the BUY rating with a target price of Bt89.0, derived using DCF methodology...

Pi Securities PCL, Thailand

Thailand Power Sector: Overweight-Bright 2021 Performance

Power Sector: Overweight-Bright 2021 sector performance. BCPG, GUNKUL, GULF top pick growth stocks. EGCO, RATCH top pick value stocks

Pi Securities PCL, Thailand

GPSC: 3Q20 Earnings to Grow YoY While Remain Flat QoQ

Last week analyst meeting came out in a neutral tone. We maintain the BUY rating with 2020E target price of Bt89, derived using DCF methodology...

Pi Securities PCL, Thailand

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