After the Prime Minister vetoed the ERC’s decision to raise the power price for the Sep-Dec period (from Bt4.00/kWh to Bt4.72/kWh, which factored in a higher gas price, but not EGAT’s burden), the ERC indefinitely postponed its press release last week. As a result, the market is now confused over whether the Sep-Dec Ft rate will rise. But the three state-owned electricity utilities—EGAT, PEA, MEA—have already published the Bt4.72/kWh rate on their websites for the period, so we assume that’s what the rate will be (unless the ERC announces a different rate ahead of Sep). GPSC is one of the leading plays for the electricity price surge theme. BUY!
2Q22 result signals a good recovery
GPSC posted 2Q22 NPAT of Bt684m, down 70% YoY but up 118% QoQ. The reported number was better than our estimate (we had expected a net loss), led by big extra gains (we had expected an extra loss). However, that reported NPAT was 13% short of the street number. Stripping out extra items, core earnings would be Bt580m, down 72% YoY but a QoQ profit turnaround. The core profit was much higher than we had expected (a fatter GM and higher revenue than we had assumed) but was 16% short of the consensus estimate.