Equity Analysis /
Thailand

Gunkul Engineering PCL: Good news queueing up!

  • Diminished expectations for earnings is priced in …

  • …and 2H22 outlook is fair

  • When electricity price rises, we think about SPPs, but actually …

Bualuang Securities
1 September 2022

The recent share price fall has factored in the impact of GUNKUL’s diminished stake in its wind farms. Given its good 2H22 earnings outlook, potential for long-term growth across all businesses, and benefits tied to a rising electricity price through 2023, we expect the stock to rally soon. BUY!

Diminished expectations for earnings is priced in …

GUNKUL’s share price has declined by 10% since it announced the setting up of the GULF-GUNKUL JV on July 27 (GUNKUL transferred wind farms totaling 170MW into the JV entity and GULF paid Bt5bn in cash for a 50% stake, so we have cut our GUNKUL long-term earnings forecasts in the 10-15% range and our YE22 target price from Bt7 to Bt6.50). The market has already priced in the diminished profit outlook, we believe. But if GUNKUL or the JV were to announce a new invest-ment, it would generate positive market sentiment and trigger a flow of street earnings forecast upgrades.