Equity Analysis /
Thailand

Gulf Energy Development PCL: Thailand’s next Bt1 trillion company?

  • To benefit from both a higher electricity price …

  • …and a potential gas price surge in 2023

  • Big cash reserves in preparation for some good news soon?

Bualuang Securities
22 August 2022

GULF is benefiting from rising electricity and gas prices. And its forecast earnings CAGR is in double digits for years ahead. We still don’t know when the firm will enter its mature slow-growth stage, given how aggressively it is expanding its businesses. As GULF is transforming into a diverse infrastructure leviathan, we now think it could realistically become a trillion baht company.  

To benefit from both a higher electricity price …

Although 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), there hasn’t been any feedback from the ERC. And EGAT, the PEA, and the MEA have already announced the Bt4.72/kWh rate, which will be benchmark for SPPs’ power sales to IUs (unless the ERC declares a different rate ahead of Sep). As GULF will dispatch 2.5-3.0TWh of electricity to IUs in 2022-23, every Bt1.00/kWh increase to the Ft charge would mean scope for upside to GULF’s full-year earnings in the range of Bt2.0-2.5bn (about 20% extra to our current 2022-23 projections).