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.

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%. 

Thematic (Sector/Industry)

<ul><li>Negative surrounding factors pressured the share prices of the power sector last week.</li><li>Meanwhile, our key assumptions for 2024E, including SPP gas prices and the electricity sales volume of IUs, have been maintained.</li><li>The valuation metrics suggest that SPP operators’ current valuations are attractive and that the downside risk is very limited, with the equity risk premiums (ERP) higher than the 90-day rolling average. </li></ul>

Negative surrounding factors pressured the share prices of the power sector last week.Meanwhile, our key assumptions for 2024E, including SPP gas prices and the electricity sales volume of IUs, have been maintained.The valuation metrics suggest that SPP operators’ current valuations are attractive and that the downside risk is very limited, with the equity risk premiums (ERP) higher than the 90-day rolling average. 

Industry Update - Energy (Power) - JUNE 17, 2024

<ul><li>The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat from the previous period.</li><li>These rates align with the Case 3 scenario, representing the lowest figures, and are in line with our 2024E projections, supported by the declining trend in gas costs, including lower LNG prices and increased G1/61 gas volume.</li><li>The decision is expected to facilitate effective management of electricity tariffs and enhance the opportunities and continuity for EGAT's reclamation of the Ft subsidy, which is nearing Bt100bn. </li></ul>

The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat from the previous period.These rates align with the Case 3 scenario, representing the lowest figures, and are in line with our 2024E projections, supported by the declining trend in gas costs, including lower LNG prices and increased G1/61 gas volume.The decision is expected to facilitate effective management of electricity tariffs and enhance the opportunities and continuity for EGAT's reclamation of the Ft subsidy, which is nearing Bt100bn. 

Energy (Power) - Flat Electricity Tariff and Ft for May to August

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

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

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

<ul>
<li>We maintain the HOLD rating with a TP of Bt4.45. The GUNKUL-GULF JV, and reduction of GUNKUL’s stake in 3 wind farm projects to 50% (from previous 100%)</li>
<li>Event:GUNKUL-GULF form JV to expend RE portfolio The company informs the SET about selling 50% share of Gulf Gunkul Corporation, the joint venture company between Gunkul and with Gulf Renewable</li>
<li>Meanwhile,GUNKUL contributes the 3 wind energy power projects with installed capacity of 170MW(Wind energy group)into the JV with total asset side of Bt13.4bn and net profit of Bt229m as of1Q22.</li>
</ul>


We maintain the HOLD rating with a TP of Bt4.45. The GUNKUL-GULF JV, and reduction of GUNKUL’s stake in 3 wind farm projects to 50% (from previous 100%)
Event:GUNKUL-GULF form JV to expend RE portfolio The company informs the SET about selling 50% share of Gulf Gunkul Corporation, the joint venture company between Gunkul and with Gulf Renewable
Meanwhile,GUNKUL contributes the 3 wind energy power projects with installed capacity of 170MW(Wind energy group)into the JV with total asset side of Bt13.4bn and net profit of Bt229m as of1Q22.


GUNKUL : JV with GULF to Capture Synergy Benefits

<ul>
<li>Opportunity day meeting came out in a positive tone. We maintain the HOLD recommendation based on a target price of Bt4.45, because of demanding valuation as the current share price</li>
<li>Expect the 4Q21 recurring profit to improve YoY from growing contribution of 130MW solar power plants added in Dec 2020, and higher revenue recognition from EPC&amp; equipment sales segment after </li>
<li>Positive 2022 outlook, as the company target to achieve a 20% YoY revenue growth in 2022, foreseeing 1) recognition of up to 30% from Bt12.0bn EPC backlog,2)solid power business performance</li>
</ul>


Opportunity day meeting came out in a positive tone. We maintain the HOLD recommendation based on a target price of Bt4.45, because of demanding valuation as the current share price
Expect the 4Q21 recurring profit to improve YoY from growing contribution of 130MW solar power plants added in Dec 2020, and higher revenue recognition from EPC&amp; equipment sales segment after 
Positive 2022 outlook, as the company target to achieve a 20% YoY revenue growth in 2022, foreseeing 1) recognition of up to 30% from Bt12.0bn EPC backlog,2)solid power business performance


GUNKUL: Growth Intact from Power & Hemp Business Expansion

Thailand

Gunkul Engineering PCL is a power generation and engineering company that supplies hardware and accessory products used in electrical power transmission and distribution systems.

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Gunkul Engineering (GUNKUL TB)

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

Industry Update - Energy (Power) - JUNE 17, 2024

Headwinds from inflated share prices; cheap valuation, limited downside. Negative surrounding factors pressured the share prices of the power...

Krungthai XSpring

Energy (Power) - Flat Electricity Tariff and Ft for May to August

The Energy Regulatory Commission (ERC) resolved to set the electricity tariff at Bt4.18/unit and Ft at Bt0.3972/unit for May to August 2024, flat...

Krungthai XSpring

GUNKUL : JV with GULF to Capture Synergy Benefits

We maintain the HOLD rating with a TP of Bt4.45. The GUNKUL-GULF JV, and reduction of GUNKUL’s stake in 3 wind farm projects to 50%(from previous...

Pi Securities PCL, Thailand

GUNKUL: Growth Intact from Power & Hemp Business Expansion

Opportunity day meeting came out in a positive tone. We maintain the HOLD recommendation based on a target price of Bt4.45, because of demanding...

Pi Securities PCL, Thailand

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