As the current coal price has risen substantially, further upside to the coal prices seems limited, so we don’t see any obvious catalyst for the share price in the near-term. However, its undemanding valuation—trades at a YE22 PBV of 1.1x (0.3SD below its long-term mean of 1.2x)—and a scope for upside to its long-term earnings profile from potential new investments in smart energy businesses (BanpuNEXT) should support the downside risk to the share price.
BANPU reported a 1Q22 net profit of Bt10,264m, up 7-fold YoY and 194% QoQ. Stripping out extra items, core earnings would be Bt8,878m, up 12-fold YoY but down 18% QoQ. The result was 28% below our estimate, due to lower equity income and smaller extra gains than assumed (10% below the consensus).