We expect expanding electricity demand among industrial users (IUs), cost reductions tied to new gas turbines (SPP replacement program), efficiency improvements, and proprietary LNG imports (BGRIM signed long-term contracts in 2020, when LNG prices were low) to support 2023 earnings growth. BGRIM as our leading play for the power price surge theme. BUY!
Net loss (as expected), but a core profit beat!
BGRIM announced a 2Q22 net loss of Bt193m, YoY and QoQ reversals from profit. The red ink was in line with our estimate, but was 13% deeper than the consensus projection. Stripping out extra items, core profit would be Bt147m, down 85% YoY but up 332% QoQ. The core number was 262% ahead of our estimate (a fatter GM than assumed) and 22% ahead of the consensus.