On Monday, the share price of B.Grimm Power Public Company Limited (SET: BGRIM) closed at THB 13.00 in morning session, a THB 0.90 or 7.44% increase with a total trading value of THB 447.49 million.
KGI Securities (Thailand) has issued a bullish outlook for BGRIM, citing three key positive factors:
1) The anticipated reduction in the country’s electricity tariff has progressed more slowly than forecast, due to regulatory constraints, unresolved political issues, and weaker incentives. As a result, analysts have revised their power tariff assumptions upward to THB 4.02/3.85/3.85 per kWh (from the previous THB 3.94/3.70/3.70 per kWh projections).
2) Recoveries in industrial user (IU) power demand. Data from 2Q25 analyst meetings of several listed power companies indicate that prior concerns regarding industrial power demand were overly pessimistic.
Production utilization rates among key industrial clients—including the automotive, tire, and petrochemical sectors—are showing tangible signs of recovery. This upturn is supported by broad industrial adjustments and decreased U.S. import tariffs imposed on Thai exports.
3) Easing concerns over Vietnam electricity tariff. Most energy operators in Vietnam now expect the long-awaited power tariff adjustment to be finalized by the end of 2025. The likely rate will be 49.35 US cents/kWh rather than 7.09 US cents/kWh, reflecting the Vietnamese government’s cautious approach to avoid disputes with investors and maintain confidence in the sector.
As a result, KGI has raised BGRIM’s core profit estimate for 2025-2027 by 12-22%, in line with the higher electricity tariff assumptions and strengthening industrial user demand. BGRIM’s core profit for the first half of 2025 reached THB 1.2 billion (up 12% year-over-year), accounting for 60% of the full-year 2025 forecast.
However, analysts expect core profit for the second half of 2025 to soften compared to earlier quarters. 3Q25 core profit could decline substantially quarter-on-quarter due to reduced service revenue and higher maintenance costs, despite improved SPP margins. Furthermore, 4Q25 core profit could mark the year’s low point, pressured by seasonality, scheduled maintenance shutdowns, and softer industrial demand.
Reflecting the improved earnings outlook, KGI Securities upgrades its recommendation on BGRIM to “Buy” from “Hold” and raises its 2026 DCF-based target price to THB 14.00 (using a WACC of 6.1%, down from 6.6%; previous target THB 10.10). This target is based on the stronger earnings forecast and a normalization of the discount applied to Vietnamese assets amid significantly reduced perceived risks.
With less regulatory intervention in Thailand’s tariff setting and a gradual recovery in industrial demand, KGI expects BGRIM shares to further outperform, also supported by expectations of lower global interest rates and a stronger Thai baht versus the U.S. dollar.
