The expectations of substantial core earnings growth in 4Q21 should catalyze the share price going forward. BANPU’s current valuation is undemanding—a YE22 PBV of 0.9x (0.6SD below its long-term mean of 1.2x). And there’s scope for upside to its long-term earnings profile from potential new investments in smart energy businesses (BanpuNEXT).
Core profit beat our estimate; bottom-line below estimates
BANPU reported a 3Q21 net profit of Bt3,505m, a YoY turnaround and up 164% QoQ. Stripping out extra items, core earnings would be Bt7,993m, a YoY turnaround and up 235% QoQ. While the bottom-line was somewhat below our estimate (22% below the consensus), due to bigger extra losses than assumed, the core profit was far above our forecast, due to bigger earnings at coal and gas biz than expected.