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Pi Securities PCL, Thailand

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Equity Bottom-Up

Global Power Synergy Company Ltd / Equity Bottom-Up

<ul>
<li>We maintain our HOLD rating due to limited upside following the rise in gas cost in 2H22. GPSC’s 2Q22 net profit doubled QoQ to Bt684m (-70%YoY),in line with our expectations.</li>
<li>2Q22 earnings improved QoQ but dropped YoY GPSC’s 2Q22 net profit improved QoQ to Bt684m (-70% YoY, 118% QoQ). The results came out in line with our expectations.  </li>
<li>GPM in 2Q22 improved to 5.4% QoQ (vs 2.6% in 1Q22) while worsened YoY (18.3% in 2Q21).  </li>
</ul>


We maintain our HOLD rating due to limited upside following the rise in gas cost in 2H22. GPSC’s 2Q22 net profit doubled QoQ to Bt684m (-70%YoY),in line with our expectations.
2Q22 earnings improved QoQ but dropped YoY GPSC’s 2Q22 net profit improved QoQ to Bt684m (-70% YoY, 118% QoQ). The results came out in line with our expectations.  
GPM in 2Q22 improved to 5.4% QoQ (vs 2.6% in 1Q22) while worsened YoY (18.3% in 2Q21).  


<ul>
<li>We maintain the HOLD rating based on a target price of Bt69.0,derived using DCF methodology (WACC 5.7% and TG 1%),implying 32x PE’23E.Our valuation reflects weak SPP operations outlook in 2022</li>
<li>Expect the 2Q22 earnings to improve QoQ,from 1) better SPP margin backed by upward Ft adjustment 2) Full quarter profit recognition from GE phase 5 after maintenance shut down (3Q21-1Q22)</li>
<li>Full year 2022 outlook remains weak, as we expect the EPS to shrink by 37%.YoY due to continued pressure on SPP margins from high fuel cost. We are more positive </li>
</ul>


We maintain the HOLD rating based on a target price of Bt69.0,derived using DCF methodology (WACC 5.7% and TG 1%),implying 32x PE’23E.Our valuation reflects weak SPP operations outlook in 2022
Expect the 2Q22 earnings to improve QoQ,from 1) better SPP margin backed by upward Ft adjustment 2) Full quarter profit recognition from GE phase 5 after maintenance shut down (3Q21-1Q22)
Full year 2022 outlook remains weak, as we expect the EPS to shrink by 37%.YoY due to continued pressure on SPP margins from high fuel cost. We are more positive 


GPSC: Improving Earnings Performance from Tariff Adjustment

<ul>
<li>GPSC reported 1Q22 net profit of Bt313m (-84%YoY, -73% QoQ),an all time low. The result came out lower than our expectation, mainly dragged by the slump in SPP margins due </li>
<li>The gross profit margin in 1Q22 fall to an all time low of 3%,compared to 20% in 1Q21 and 8% in 4Q21, following the rise in natural gas fuel cost</li>
<li>We turn negative on GPSC 2022 earnings outlook,the SPP margins are expected to remain under pressure in 1H22 and gradually pick up 3Q22 onwards as the fuel price begins normalizing.</li>
</ul>


GPSC reported 1Q22 net profit of Bt313m (-84%YoY, -73% QoQ),an all time low. The result came out lower than our expectation, mainly dragged by the slump in SPP margins due 
The gross profit margin in 1Q22 fall to an all time low of 3%,compared to 20% in 1Q21 and 8% in 4Q21, following the rise in natural gas fuel cost
We turn negative on GPSC 2022 earnings outlook,the SPP margins are expected to remain under pressure in 1H22 and gradually pick up 3Q22 onwards as the fuel price begins normalizing.


GPSC: 1Q22 Earnings Hit by Low SPP Margin

<ul>
<li>Last week analyst meeting came out in a neutral tone. we see the overhang from rise in fuel cost (in 2021) to remain till 2H22, and later recover </li>
<li>Expect the 1Q22 earnings to improve QoQ,from 1)Slightly improved SPP margin from upward Ft (tariff) adjustment and  2) Increasing IU sales. However, spike in fuel cost would drag SPP margins</li>
<li>We are more positive on 2H22,2023 outlook,as we expect a 15% EPS growth in 2023 from recovering SPP margins, Increased IU sales volume, and higher share of profit from Avaada</li>
</ul>


Last week analyst meeting came out in a neutral tone. we see the overhang from rise in fuel cost (in 2021) to remain till 2H22, and later recover 
Expect the 1Q22 earnings to improve QoQ,from 1)Slightly improved SPP margin from upward Ft (tariff) adjustment and  2) Increasing IU sales. However, spike in fuel cost would drag SPP margins
We are more positive on 2H22,2023 outlook,as we expect a 15% EPS growth in 2023 from recovering SPP margins, Increased IU sales volume, and higher share of profit from Avaada


GPSC: High Fuel Cost to Pressure SPP Margin in 1H22

<ul>
<li>Last week analyst meeting came out in a neutral tone. The natural gas cost is expected to continue the rally and peak in 2Q22, which will continue to pressure </li>
<li>Expect 4Q21 earnings to drop both YoY and QoQ on the back of 1) seasonal weak IPP and SPP operation, 2) decline in SPP gross margin due to rising </li>
<li>We anticipate the earnings to gain momentum 2022 onwards. This will be mainly driven by the new acquisitions in 3Q21 viz., Avaada projects (1.9GWe in 2021-23 period), and CFXD offshore </li>
</ul>


Last week analyst meeting came out in a neutral tone. The natural gas cost is expected to continue the rally and peak in 2Q22, which will continue to pressure 
Expect 4Q21 earnings to drop both YoY and QoQ on the back of 1) seasonal weak IPP and SPP operation, 2) decline in SPP gross margin due to rising 
We anticipate the earnings to gain momentum 2022 onwards. This will be mainly driven by the new acquisitions in 3Q21 viz., Avaada projects (1.9GWe in 2021-23 period), and CFXD offshore 


GPSC: Weak 4Q21 Outlook from Rising Gas Cost

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 : 2Q22 Earnings Recovered QoQ

We maintain our HOLD rating due to limited upside following the rise in gas cost in 2H22. GPSC’s 2Q22 net profit doubled QoQ to Bt684m (-70% YoY),...

Pi Securities PCL, Thailand

GPSC: Improving Earnings Performance from Tariff Adjustment

We maintain the HOLD rating based on a target price of Bt69.0, derived using DCF methodology (WACC 5.7% and TG 1%), implying 32x PE’23E. Our...

Pi Securities PCL, Thailand

GPSC: 1Q22 Earnings Hit by Low SPP Margin

GPSC reported 1Q22 net profit of Bt313m (-84%YoY, -73% QoQ), an all time low. The result came out lower than our expectation, mainly dragged by the...

Pi Securities PCL, Thailand

GPSC: High Fuel Cost to Pressure SPP Margin in 1H22

Last week analyst meeting came out in a neutral tone. we see the overhang from rise in fuel cost (in 2021) to remain till 2H22, and later recover...

Pi Securities PCL, Thailand

GPSC: Weak 4Q21 Outlook from Rising Gas Cost

Last week analyst meeting came out in a neutral tone. The natural gas cost is expected to continue the rally and peak in 2Q22, which will continue...

Pi Securities PCL, Thailand

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52-week Range

Market Cap (USDm)

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