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 BUY recommendation for CKP with a target price of Bt6.40, underpinned by steady earnings growth in 2023E driven by higher electricity production from XPCL along with margin expansion </li>
<li>CKP increases 8% shareholding in LPCL CKP acquires an additional 8% share of LPCL (Luang Prabang Hydroelectric Power Project, SCOD:1Q30) for Bt2.56m, bringing the total shareholding in LPCL to 50%</li>
<li>LPCL is a 1,460MW run-of-river dam that will operate continuously year-round. It is designed with 7 turbines,each producing 200MW, and a number of auxiliary units using water from fish attraction </li>
</ul>


We Maintain BUY recommendation for CKP with a target price of Bt6.40, underpinned by steady earnings growth in 2023E driven by higher electricity production from XPCL along with margin expansion 
CKP increases 8% shareholding in LPCL CKP acquires an additional 8% share of LPCL (Luang Prabang Hydroelectric Power Project, SCOD:1Q30) for Bt2.56m, bringing the total shareholding in LPCL to 50%
LPCL is a 1,460MW run-of-river dam that will operate continuously year-round. It is designed with 7 turbines,each producing 200MW, and a number of auxiliary units using water from fish attraction 


CKP : Stable and Positive Outlook for 2023

<ul>
<li>Yesterday analyst meeting came out in a neutral tone. We maintain our BUY recommendation based on a target price of Bt6.40, derived using DCF methodology (7.6% WACC and 1% TG)</li>
<li>Expect 4Q21 earnings to drop QoQ due to lower electricity sales from hydro projects in Lao PDR (NN2, XPCL), from seasonally weak water inflow. While improve YoY as the company </li>
<li>The company has 2.1GW power plant installed capacity in portfolio (1.0GWe), and target to expand it by 2x to 5.GW by 2025. we expect CKP will capture near term growth </li>
</ul>


Yesterday analyst meeting came out in a neutral tone. We maintain our BUY recommendation based on a target price of Bt6.40, derived using DCF methodology (7.6% WACC and 1% TG)
Expect 4Q21 earnings to drop QoQ due to lower electricity sales from hydro projects in Lao PDR (NN2, XPCL), from seasonally weak water inflow. While improve YoY as the company 
The company has 2.1GW power plant installed capacity in portfolio (1.0GWe), and target to expand it by 2x to 5.GW by 2025. we expect CKP will capture near term growth 


CKP: Cheap Valuation but Lacks near Term Growth Catalyst

Thailand

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

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CK Power PCL (CKP 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

CKP : Stable and Positive Outlook for 2023

We Maintain BUY recommendation for CKP with a target price of Bt6.40, underpinned by steady earnings growth in 2023E driven by higher electricity...

Pi Securities PCL, Thailand

CKP: Cheap Valuation but Lacks near Term Growth Catalyst

Yesterday analyst meeting came out in a neutral tone. We maintain our BUY recommendation based on a target price of Bt6.40, derived using DCF...

Pi Securities PCL, Thailand

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