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

<p>GPSC’s 1H21 earnings contained no surprises, prompting us to keep our full-year forecasts unchanged. We remain confident in the company’s growth prospects after its fast step to expand its renewable portfolio to 34% with the recent acquisitions in Avaada (solar projects) in India and offshore wind projects in Taiwan. We maintain a Hold rating.</p>

GPSC’s 1H21 earnings contained no surprises, prompting us to keep our full-year forecasts unchanged. We remain confident in the company’s growth prospects after its fast step to expand its renewable portfolio to 34% with the recent acquisitions in Avaada (solar projects) in India and offshore wind projects in Taiwan. We maintain a Hold rating.

Earnings Review: Global Power Synergy Plc.

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

<p><strong>Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt95.0, derived using DCF methodology (WACC of 5.3% and TG 1%). Our valuation implies 30x PE’22E.</strong></p><div>• Expect 3Q21 earnings to improve both YoY and QoQ on the back of 1) profit recognition from 659MWe new capacity additions in 2Q21 and 2) seasonal high equity income gain from XPCL due to batter water inflow.</div><div></div><div>• 4Q21 earnings would soften QoQ due to seasonal low domestic electricity sales and weak profit gain from XPCL.</div><div></div><div><div>• Positive 2021-23 earnings outlook backed by 14% CAGR power generation capacity expansion. GPSC has 5.4GWe projects in operation as of 2Q21 and further 1.7GWe project will go online in 2022-23 period increasing the capacity to 7.1GWe (+31% growth).</div></div>

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt95.0, derived using DCF methodology (WACC of 5.3% and TG 1%). Our valuation implies 30x PE’22E.• Expect 3Q21 earnings to improve both YoY and QoQ on the back of 1) profit recognition from 659MWe new capacity additions in 2Q21 and 2) seasonal high equity income gain from XPCL due to batter water inflow.• 4Q21 earnings would soften QoQ due to seasonal low domestic electricity sales and weak profit gain from XPCL.• Positive 2021-23 earnings outlook backed by 14% CAGR power generation capacity expansion. GPSC has 5.4GWe projects in operation as of 2Q21 and further 1.7GWe project will go online in 2022-23 period increasing the capacity to 7.1GWe (+31% growth).

GPSC: New Capacity Addition to Drive 2H21 Earnings

<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

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<p>On 14 December 2016, <a href="https://www.smartkarma.com/entities/agc-inc" target="_blank" data-smartkarma-citation="entities:2167:1" rel="noopener">AGC Inc (5201 JP)</a> <a href="https://www.set.or.th/dat/news/201612/16094295.pdf" target="_blank" rel="noopener">entered into</a> an agreement with Solvay Chemicals and Plastics Holding, and Solvay Vinyls Holding (collectively, Solvay) to acquire 696,511,059 shares, or 58.77% of shares out, in <a href="https://www.smartkarma.com/entities/vinythai-public-co-limited" target="_blank" data-smartkarma-citation="entities:14107:1" rel="noopener">Vinythai Public Co (VNT TB)</a>, at Bt15.00/share, for a total consideration of Br10.4bn.</p>
<p>AGC completed the acquisition of shares in VNT on <a href="https://www.set.or.th/dat/news/201702/17013362.pdf" target="_blank" rel="noopener">22 February 2017</a>. This share acquisition triggered a mandatory tender offer. VNT received an Announcement of Intention to Make a Tender Offer (<a href="https://www.set.or.th/dat/news/201702/17013376.pdf" target="_blank" rel="noopener">Form 247-3</a>) on 23 February 2017.</p>
<p>On 1 March 2017, AGC submitted a copy of the Tender Offer (or <a href="https://www.set.or.th/dat/news/201703/17019209.pdf" target="_blank" rel="noopener">Form 247-4</a>) to purchase shares not held or 41.23% of shares out, at Bt15/share. The Tender Offer period was from the 3 March 2017 to 7 April 2017, a period of 25 business days.</p>
<p>At the close of the Offer, 152,450 shares tendered - or 0.01% of shares out - giving AGC <a href="https://www.set.or.th/dat/news/201704/17029860.pdf" target="_blank" rel="noopener">58.78%</a>. The second-largest shareholder was <a href="https://www.smartkarma.com/entities/ptt-global-chemical-pcl" target="_blank" data-smartkarma-citation="entities:19852:1" rel="noopener">PTT Global Chemical (PTTGC TB)</a> with 24.98%.</p>
<p>Then crickets.</p>
<h3>The New News</h3>
<p>Following a board directors meeting, VNT <a href="https://www.set.or.th/dat/mds_news/news/0475NWS190320210801090046E.pdf" target="_blank" rel="noopener">announced</a> PTTGC and AGC have indicated their intention to delist VNT from the SET.</p>
<p>PTTGC  will offer to purchase shares at Bt39/share. AGC will not tender any of its 57.78% stake in such a tender offer.</p>
<p>This looks done and dusted, and trading tight to terms.</p>
<p>More below the fold.</p>

On 14 December 2016, AGC Inc (5201 JP) entered into an agreement with Solvay Chemicals and Plastics Holding, and Solvay Vinyls Holding (collectively, Solvay) to acquire 696,511,059 shares, or 58.77% of shares out, in Vinythai Public Co (VNT TB), at Bt15.00/share, for a total consideration of Br10.4bn.
AGC completed the acquisition of shares in VNT on 22 February 2017. This share acquisition triggered a mandatory tender offer. VNT received an Announcement of Intention to Make a Tender Offer (Form 247-3) on 23 February 2017.
On 1 March 2017, AGC submitted a copy of the Tender Offer (or Form 247-4) to purchase shares not held or 41.23% of shares out, at Bt15/share. The Tender Offer period was from the 3 March 2017 to 7 April 2017, a period of 25 business days.
At the close of the Offer, 152,450 shares tendered - or 0.01% of shares out - giving AGC 58.78%. The second-largest shareholder was PTT Global Chemical (PTTGC TB) with 24.98%.
Then crickets.
The New News
Following a board directors meeting, VNT announced PTTGC and AGC have indicated their intention to delist VNT from the SET.
PTTGC  will offer to purchase shares at Bt39/share. AGC will not tender any of its 57.78% stake in such a tender offer.
This looks done and dusted, and trading tight to terms.
More below the fold.

Vinythai (VNT TH): Delisting Offer From PTTGC

Thailand

Ratch Group PCL operates as a power producer company. The Company focuses on investment fossil fuel power generation and renewable projects, as well as businesses adjacent to electricity generation and energy. Ratchaburi Group serves customers in Asia.

Electricity Generating Public Company Limited is an electric utility holding company.  The Company, through its two major subsidiaries, produces and supplies electricity to the Electricity Generating Authority of Thailand (EGAT), under long term power purchase agreements of 20 and 15 years.  It also operates energy related businesses through joint ventures.

B.Grimm Power Public Company Limited operates as a renewable energy company. The Company focuses on the development, financing, construction, and operation of green field power plants. B.Grimm Power also renders electricity distribution, operations, and maintenance services. B.Grimm Power serves clients in Asia.

CK Power PCL develops and generates power. The Company operates in Thailand.

Banpu Power PCL operats power plants in Thailand, Laos, China and Japan.

TPI Polene Power Public Company Limited operates waste heat recovery power plants and oil and natural gas (NGV) stations. The Company conducts business in Thailand.

TPI Polene Power Public Company (TPIPP TB)

Energy Absolute Public Company Limited engages in the research, development, and production of biodiesel products in Thailand.

SPCG PCL is an alternative energy company that is developing solar farms.  The Company is developing solar farms located in the Northeastern region of Thailand.

Super Energy Corporation Public Company Limited produces and distributes electricity using solar and alternative energy sources. The Company also offers information technology services. Super Energy Corporation serves customers in Thailand.

Sahacogen Chonburi Public Company Limited is a power production company that generates steam and electricity by using the Cogeneration Technology.

Electric Power Development Co.,Ltd. generates, transmits, distributes, and sells electric power using hydroelectric, wind-power, nuclear, coal-fired and other thermal power stations throughout Japan.

Guangzhou Development Group Inc operates an electric power generation plant in Guangzhou, China.  The Company also sells coal, invests in the fiber-optic cable network installation business, and constructs roads and bridges.

An Hui Wenergy Co., Ltd. generates electric power.  Through its subsidiaries, the company also manufactures networking terminal products.

Clearway Energy, Inc. owns, operates, and acquires renewable and conventional generation and thermal infrastructure projects. The Company offers natural gas and dual fired, solar and wind generation and distribution services. Clearway Energy serves commercial businesses, universities, hospitals, and government companies in the United States.

Beijing Jingneng Power Co., Ltd. generates electrical and thermal power.  The Company also maintains and repairs electricity generation equipment.

Encavis AG provides electricity generation from power plants. The Company produces power from renewable energy sources which includes solar energy plants and wind farms, as well as specializes in the technical operation of solar parks, routine maintenance, monitoring, incident management, and performance analysis. Encavis serves renewable energy sector in Europe.

Drax Group PLC generates and supplies electricity.  The Company owns a coal and biomass-fired power plant in the United Kingdom.

The Renewables Infrastructure Group Limited is an investment company. The Company invests in a range of assets that generate electricity from renewable sources, with a particular focus on onshore wind farms and solar PV parks.

AC Energy Corp operates as a renewable power generation company. The Company operates wind, solar, and geothermal energy plants. AC Energy serves customers in Philippines.

Enel Generacion Chile SA operates as an electricity generation company. The Company generates and distributes electric energy.

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)

Earnings Review: Global Power Synergy Plc.

Sustainable growth, moving toward renewable energy, GPSC’s 1H21 earnings contained no surprises, prompting us to keep our full-year forecasts...

Krungthai XSpring

GPSC: New Capacity Addition to Drive 2H21 Earnings

Last week analyst meeting came out in a positive tone. We maintain the BUY recommendation based on a target price of Bt95.0, derived using DCF...

Pi Securities PCL, Thailand

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

Vinythai (VNT TH): Delisting Offer From PTTGC

This looks done and trading accordingly with a gross/annualised return of 1.9%/5.0%, assuming completion on 11 August. Not a lot in it. Pus there...

David Blennerhassett

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