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

<ul><li>The 3Q24 net profit was weak due to a forex loss as expected, while core profit remained strong YoY and QoQ.</li><li>We maintain our 2024-26E core profit estimates (with 2024E expected to grow by +7% and 2025-26E at a 10% CAGR, supported by the commercial kick-off of projects in the pipeline).</li><li>The current valuation implies wider upside gain of 16% from the fair value (FV) of Bt24.52. </li></ul>

The 3Q24 net profit was weak due to a forex loss as expected, while core profit remained strong YoY and QoQ.We maintain our 2024-26E core profit estimates (with 2024E expected to grow by +7% and 2025-26E at a 10% CAGR, supported by the commercial kick-off of projects in the pipeline).The current valuation implies wider upside gain of 16% from the fair value (FV) of Bt24.52. 

B.grimm Power - 3Q24 NP Pressured by Forex Losses but Strong Core Profit

<ul><li>We expect weak 3Q24E net profit due to a forex loss, while core profit should have remained strong.</li><li>We have revised up the 2024E core profit and net profit by 16%, mostly because of non- core items, while maintaining our forecast for core profit growth at a 10% CAGR for 2025-26E, driven by the scheduled commercial kick-off of projects in the pipeline.</li><li>In addition, there is growth potential in green power both domestically (RE 2, industrial solutions/data center, private PPA) and internationally. </li></ul>

We expect weak 3Q24E net profit due to a forex loss, while core profit should have remained strong.We have revised up the 2024E core profit and net profit by 16%, mostly because of non- core items, while maintaining our forecast for core profit growth at a 10% CAGR for 2025-26E, driven by the scheduled commercial kick-off of projects in the pipeline.In addition, there is growth potential in green power both domestically (RE 2, industrial solutions/data center, private PPA) and internationally. 

B.grimm Power - Forex Loss to Weigh on Net Profit, but Strong Core Profit in 3Q24E

<ul><li>The downside risk to the share price is very limited after a 30% YTD decline.</li><li>This reflects a weaker outlook for IU margins in 2H24E, uncertainties about the continuation of government power subsidy policies and Ft adjustments, which may restrict the upside potential for SPP operators, and limited growth in power sales volume to IUs.</li><li>In addition, unrealized forex losses have already been factored into our revised 2024-26E net profit forecasts, which have been adjusted downward by 52%, 17% and 16%, respectively. </li></ul>

The downside risk to the share price is very limited after a 30% YTD decline.This reflects a weaker outlook for IU margins in 2H24E, uncertainties about the continuation of government power subsidy policies and Ft adjustments, which may restrict the upside potential for SPP operators, and limited growth in power sales volume to IUs.In addition, unrealized forex losses have already been factored into our revised 2024-26E net profit forecasts, which have been adjusted downward by 52%, 17% and 16%, respectively. 

B.grimm Power - Negatives Largely Priced In; Pursuing GreenLeap Growth Strategy

<ul><li>The 2Q24E core profit grew further QoQ, but FX losses weighed on net profit, resulting in a weak YoY and QoQ performance.</li><li>The market has acknowledged the weakening IU margin outlook HoH in 2H24E, but the limited growth momentum of electricity sales volume to IUs (in 1H24 at +1% YoY) and the high unrealized forex losses in 1H24 may lead to downward revisions to both our core profit and net profit forecasts, as well as the consensus estimates in 2024E.</li><li>In addition, the FV and stock rating are under review (from Buy and an FV of Bt29.5 currently). </li></ul>

The 2Q24E core profit grew further QoQ, but FX losses weighed on net profit, resulting in a weak YoY and QoQ performance.The market has acknowledged the weakening IU margin outlook HoH in 2H24E, but the limited growth momentum of electricity sales volume to IUs (in 1H24 at +1% YoY) and the high unrealized forex losses in 1H24 may lead to downward revisions to both our core profit and net profit forecasts, as well as the consensus estimates in 2024E.In addition, the FV and stock rating are under review (from Buy and an FV of Bt29.5 currently). 

B.grimm Power - 2Q24 Core Profit Growth QoQ; FX Loss Pressured NP as Expected

<ul><li>We expect the 2Q24E core profit to have grown further QoQ, but FX losses likely weighed on net profit, resulting in a weak YoY and QoQ performance.</li><li>The IU margin outlook may also weaken in 2H24E due to a stable Ft in the final period and higher gas costs HoH.</li><li>These factors may have already been priced into the stock to a certain degree, while the key assumptions for 2024E remain in line with our projections. </li></ul>

We expect the 2Q24E core profit to have grown further QoQ, but FX losses likely weighed on net profit, resulting in a weak YoY and QoQ performance.The IU margin outlook may also weaken in 2H24E due to a stable Ft in the final period and higher gas costs HoH.These factors may have already been priced into the stock to a certain degree, while the key assumptions for 2024E remain in line with our projections. 

B.grimm Power - Expect 2Q24E Core Profit Growth QoQ but NP Pressured by FX Loss

Thailand

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.

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B Grimm Power (BGRIM TB)

B.grimm Power - 3Q24 NP Pressured by Forex Losses but Strong Core Profit

We maintain our 2024-26E core profit estimates (with 2024E expected to grow by +7% and 2025-26E at a 10% CAGR, supported by the commercial kick-off...

Krungthai XSpring

B.grimm Power - Forex Loss to Weigh on Net Profit, but Strong Core Profit in 3Q24E

We expect weak 3Q24E net profit due to a forex loss, while core profit should have remained strong. We have revised up the 2024E core profit and...

Krungthai XSpring

B.grimm Power - Negatives Largely Priced In; Pursuing GreenLeap Growth Strategy

In addition, unrealized forex losses have already been factored into our revised 2024-26E net profit forecasts, which have been adjusted downward...

Krungthai XSpring

B.grimm Power - 2Q24 Core Profit Growth QoQ; FX Loss Pressured NP as Expected

We maintain our view that the 2-year core profit is on an uptrend. Meanwhile, the current valuation sees limited tactical downside risk.

Krungthai XSpring

B.grimm Power - Expect 2Q24E Core Profit Growth QoQ but NP Pressured by FX Loss

We expect the 2Q24E core profit to have grown further QoQ, but FX losses likely weighed on net profit, resulting in a weak YoY and QoQ performance.

Krungthai XSpring

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