Is the value of “GPSC” shares in the investment zone yet? Looking forward to 1Q24 profits, seeing signs of recovery.
Global Power Synergy Public Company Limited or GPSC is one of the leading stocks in the large power plant business. This is the mainstay of the production and distribution of electricity, steam and various utilities of the PTT Group, as well as expanding investments into the New S-Curve business, including the battery business. Smart Energy Business and other related businesses domestically and abroad
in the last 1 month The stock price fell by more than 7.11% as the market worries about the uncertainty of natural gas costs under the Single Pool Gas policy, which is an adjustment to the gas price structure formula. Previously it was based on prices in the Gulf of Thailand only. Change to average costs from all sources (Pool Gas), including the Gulf of Thailand, Myanmar, and imports of liquefied natural gas (LNG), together with pressure from an increase in Bond Yield, which is a sign of holding interest rates longer.
But on the other hand, this turns out to make GPSC stock even more interesting. With the stock price at a point where it is attractive to invest again. Because the overall picture of the business still has long-term accelerating factors, therefore, the contraction in stock prices makes Upside Gain open again.
Profit trends for 1Q24 show clearer signs of recovery.
GPSC is preparing to announce operating results for the 1st quarter of 2024 on May 8th through analysis. Yuanta Securities It is estimated that the company will have a net profit of 757 million baht, an increase of 59% from the previous quarter (QoQ) from the margin of the SPP power plant increasing in accordance with the reference electricity sales price, lower coal costs, and electricity. and the number of steam sales increased due to demand from EGAT and industrial customers, operating and maintenance costs decreased due to seasonal factors. As well as the profit share from the Avaada solar power plant in India is higher during the high season of the business.
However, profits are expected to decline compared to the same period last year (YoY) due to some key drivers not fully operating, such as SPP power plant gas costs, profit sharing from related companies has decreased . Due to the seasonal factors of Xayaburi Dam and Taiwan wind power plants, etc.
However, if the operating results for the 1st quarter of 2024 are as expected above, it will account for 14% of the full year profit estimate. and see that the trend in the second quarter of 2024 will accelerate QoQ and YoY due to entering the high season of demand for electricity in the summer. and increase the proportion of electricity produced from natural gas fuel.
Photo: GPSC page
GPSC’s new growth plan
KGI Securities He revealed that GPSC has future growth plans mainly focused on Thailand and India. The company plans to participate in a new round of RE project applications of approximately 3.7 GW in the second half of 2024 according to the PDP plan and non-PDP projects in Thailand.
Internationally, Avaada in India (GPSC owns 42.9%) will be a key player in GPSC’s clean energy drive is currently 10.6 GW and is close to reaching its target of 11 GWh by 2025, and is still progressing to seek additional new growth.
GSC stock investment advice
KGI Securities Recommend buying GPSC with a target price of 58.50 baht per share. We see that the stock has a driving factor in 2024 from strong returns from various power plants. and they do not have to record a fault. Including the expansion of Avaada’s production capacity Although he is still concerned about the performance trend of the Gheco-One coal-fired power plant, we believe that the positive factors will have more weight.
Yuanta Securities believes that, at the current price level, GPSC shares have an upside of around 16.9%, with profits for the rest of the year likely to accelerate. Meanwhile, in the long term, growth factors are based on the expansion of PTT Group and investments in renewable energy projects abroad. Therefore, we upgrade our recommendation to “Buy” at an appropriate price of 57 baht per share.
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