Earnings Report /
Thailand

Banpu Power PCL: 2Q20 result missed our estimate (but BPP’s still a good dividend play)

  • Missed estimates

  • BPP posted a 2Q20 net profit of Bt680m

  • Reported NPAT missed our estimate by 25%

Bualuang Securities
11 August 2020

The loss at BPP’s subsidiary, Banpu Next, might prompt a consensus earnings forecast downgrade (depending on the information garnered from management at the upcoming analyst meeting), which would generate negative market sentiment. Regardless, the current stock price still implies 2020-22 dividend yields in the range of 4-5%—the best forward yields among our Utilities coverage, so it’s worth holding as a dividend play. Moreover, we expect BPP to continue rallying ahead of the COD of SLG. Our BUY rating stands.

Missed estimates

BPP posted a 2Q20 net profit of Bt680m, down by 40% YoY and 30% QoQ. Reported NPAT missed our estimate by 25%. Stripping out FX losses, the core profit would be Bt799m, down by 36% YoY and 37% QoQ, missing our estimate by 21% (but beating the street by 11%). Both the net and core numbers missed our expectations because of lower sales volumes at CHP plants in China and smaller equity earnings than assumed (an extended Hongsa IPP maintenance schedule).