The approaching high season for demand and supply tightness will tend to push coal and gas prices up further through 4Q22, boosting BANPU’s strong core earnings growth in 2H22. Valuation is undemanding—trading at a YE22 PER of only 2.6x (1.1SD below its long-term mean). Also, there is a scope for upside to its long-term earnings profile from potential new investments in smart energy businesses (BanpuNEXT). Upgraded to TRADING BUY!
3Q22 core earnings to hit another record high
BANPU’s 2Q22 core profit hit a new record for quarterly earnings. Looking further ahead, the firm is poised to post another record high core earnings for 3Q22, driven by bigger profits at coal, gas, and power businesses.