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.

Thematic (Sector/Industry)

<ul><li>The Energy Regulatory Commission (ERC) has announced the purchase of 2,180 MW under the RE2 program for the first lot, which includes up to 600 MW from wind farm projects and up to 1,580 MW from solar farm projects.</li><li>This is a positive development for operators with pending projects that did not pass the RE1 Phase, as they will receive priority consideration.</li><li>Key beneficiaries may include GULF (approximately 1,000-2,000 MW), BGRIM (about 500-800 MW), GPSC (around 300-400 MW), and GUNKUL (approximately 400 MW). </li></ul>

The Energy Regulatory Commission (ERC) has announced the purchase of 2,180 MW under the RE2 program for the first lot, which includes up to 600 MW from wind farm projects and up to 1,580 MW from solar farm projects.This is a positive development for operators with pending projects that did not pass the RE1 Phase, as they will receive priority consideration.Key beneficiaries may include GULF (approximately 1,000-2,000 MW), BGRIM (about 500-800 MW), GPSC (around 300-400 MW), and GUNKUL (approximately 400 MW). 

Industry Update: Energy (Power) - September 25, 2024

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%. 

<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

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Delta Electronics Thailand  / Event-Driven

Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the SET50 index with the changes taking effect after the close of trading on 30 December.<a href="https://www.smartkarma.com/entities/bangkok-commercial-asset-management-public-company-limited" target="_blank" data-smartkarma-citation="entities:28442:1" rel="noopener">Bangkok Commercial Asset Management (BAM TB)</a>, <a href="https://www.smartkarma.com/entities/com7-pcl" target="_blank" data-smartkarma-citation="entities:27411:1" rel="noopener">Com7 PCL (COM7 TB)</a> and <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> have been included in the index, replacing <a href="https://www.smartkarma.com/entities/banpu-power-pcl" target="_blank" data-smartkarma-citation="entities:23631:1" rel="noopener">Banpu Power PCL (BPP TB)</a>, <a href="https://www.smartkarma.com/entities/irpc-pcl" target="_blank" data-smartkarma-citation="entities:19051:1" rel="noopener">IRPC PCL (IRPC TB)</a> and <a href="https://www.smartkarma.com/entities/wha-corp-pcl" target="_blank" data-smartkarma-citation="entities:104:1" rel="noopener">WHA Corp Pcl (WHA TB)</a>. This was our base case scenario, though DELTA had the lowest probability of index inclusion.Terrible timing! <a href="https://www.smartkarma.com/entities/delta-electronics-thai-pcl" target="_blank" data-smartkarma-citation="entities:20912:1" rel="noopener">Delta Electronics Thai (DELTA TB)</a> has gained 543.72% since it was deleted from the SET50 index at the June review, while <a href="https://www.smartkarma.com/entities/banpu-power-pcl" target="_blank" data-smartkarma-citation="entities:23631:1" rel="noopener">Banpu Power PCL (BPP TB)</a> has gained just 2.99% since it was included in the index at the June review. Not implementing this change in June would have led to the SET50 index return being over 3.5% higher than its actual return.One-way turnover for the rebalance is 4.92%. The impact of the changes does not appear like a lot, but the active funds trading ahead of implementation date could cause the stocks to move around a lot compared to their peers.This Insight is labelled Bullish as we expect DELTA to outperform its peers post the inclusion in the SET50 index. The stock could move lower post implementation date due to its higher valuations.

Last evening post market close, the Stock Exchange of Thailand (SET) announced the results of the semi-annual review of the SET50 index with the changes taking effect after the close of trading on 30 December.Bangkok Commercial Asset Management (BAM TB), Com7 PCL (COM7 TB) and Delta Electronics Thai (DELTA TB) have been included in the index, replacing Banpu Power PCL (BPP TB), IRPC PCL (IRPC TB) and WHA Corp Pcl (WHA TB). This was our base case scenario, though DELTA had the lowest probability of index inclusion.Terrible timing! Delta Electronics Thai (DELTA TB) has gained 543.72% since it was deleted from the SET50 index at the June review, while Banpu Power PCL (BPP TB) has gained just 2.99% since it was included in the index at the June review. Not implementing this change in June would have led to the SET50 index return being over 3.5% higher than its actual return.One-way turnover for the rebalance is 4.92%. The impact of the changes does not appear like a lot, but the active funds trading ahead of implementation date could cause the stocks to move around a lot compared to their peers.This Insight is labelled Bullish as we expect DELTA to outperform its peers post the inclusion in the SET50 index. The stock could move lower post implementation date due to its higher valuations.

Thailand

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

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Banpu Power PCL (BPP TB)

Industry Update: Energy (Power) - September 25, 2024

The Energy Regulatory Commission (ERC) has announced the purchase of 2,180 MW under the RE2 program for the first lot, which includes up to 600 MW...

Krungthai XSpring

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

SET50 Index Rebalance: DELTA to Buy

BAM, COM7 and DELTA have been added to the SET50 index replacing BPP, IRPC and WHA with the changes effective after the close on 30 Dec. With 11...

Brian Freitas

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