Earnings Report /
Thailand

Gunkul Engineering PCL: Result beat!

  • Stronger net and core earnings than expected

  • GUNKUL reported a 2Q22 net profit of Bt778m

  • Revenue dipped 3% YoY but inched up 1% QoQ

Bualuang Securities
11 August 2022

The smaller stake in the windfarms totaling 170MW (which makes for a dull 2H22 outlook) may generate negative market sentiment in the short run. But we expect the JV to soon secure new renewable projects (as it currently holds Bt5bn in cash), easing the negative sentiment. Moreover, we regard GUNKUL as a good catch-up play (following SPPs) for the electricity price surge theme. The stock price has declined 5% since we trimmed our target price from Bt7 to Bt6.50 (Utilities sector report on Aug 3—Strategy for the power price timebomb), indicating that the market has priced in that duller short-term outlook, so our BUY call stands.

Stronger net and core earnings than expected

GUNKUL reported a 2Q22 net profit of Bt778m, up by 49% YoY and 55% QoQ. NPAT was 77% ahead of our estimate (greater revenue from windfarms and higher extra gains than assumed) and 95% above the consensus. Stripping out extra items, core earnings would be Bt536m, up by 4% YoY and 95% QoQ. The core number beat our estimate by 16% (greater revenue and lighter interest expenses than assumed) and the consensus by 34%.