Equity Analysis /

Banpu PCL: Favorable short-term outlook with good long-term prospects

  • Coal business...cash cow

  • Gas business...the key growth driver

  • Energy generation...another area for growth

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Bualuang Securities
31 October 2022

We hosted a virtual roadshow for domestic investors last week. The investors were broadly optimistic about BANPU’s short-term outlook and its future growth strategies. The key topics of discussion at the meeting are summarized below:

Coal business...cash cow   

The global coal market outlook is favorable, buoyed by strong demand in the face of supply tightness. Sanctions on Russian coal have boosted   European demand for coal from other countries. Moreover, the high price of natural gas has been another demand driver, as consumers will tend to shift to cheaper fuels like coal. The coal demand will be seasonally stronger in 4Q22, with the approach of the winter months in the Northern hemisphere. For the supply side, the coal supply has remained tight, due to supply disruption in key producing countries such as Australia (adverse weather conditions) and South Africa (logistical constraints). Given these trends, coal prices look set to sustain high in the near-term.