An analyst from Land and Houses Securities stated that CK Power Public Company Limited (SET: CKP) reported the hydroelectricity generation volume for August, which increased significantly from the Nam Ngum 2 and Xayaburi hydroelectric power plants, standing at 1,241 gigawatt-hours (GWh), up 10% from the previous month and 60% from the same period last year. This was due to the Nam Ngum 2 power plant’s output rising 65% from the previous month and 178% YoY, while Xayaburi power plant decreased 7% MoM but increased 30% YoY.
As a result, in 3Q25 (Jul-Aug), the production volume increased by 34% YoY, thanks to significantly higher reservoir water levels due to increased inflows following the La Niña phenomenon, and more efficient production at Xayaburi power plant compared to last year, despite lower water flow. Meanwhile, electricity generation from BIC (SPP) reached 110 GWh, up 11% from the previous month but down 18% YoY.
Additionally, Xayaburi power plant will benefit from lower market interest rates, impacting be the recent interest rate cut by the Fed, and banks’ adjustments to reduce the Minimum Lending Rate (MLR) by 0.25 percentage point to be in line with the rate cut policy of Bank of Thailand’s Monetary Policy Committee (MPC) in mid-August. This results in MLR benefits for 1.5 months in 3Q25 and a full quarter’s benefit in 4Q25.
Xayaburi power plant holds high debt of THB 80 billion, with 75% on floating interest rates, THB 40 billion (50%) linked to MLR, and another 10% tied to SOFR (Secured Overnight Financing Rate), which usually moves in line with the Fed. As for Nam Ngum 2 power plant, it has debentures maturing in Sep-Oct totaling THB 1.8 billion at interest rates of 3.60-3.69%, which are expected to be replaced with new borrowings.
Meanwhile, due to the significantly increased power production in 3Q25 and lower financial costs, it is expected that core profit in the third quarter this year will stand out, rising substantially from the same period last year (in 3Q24 when Xayaburi power plant ceased production for 17 days).
Furthermore, CKP is expected to benefit from foreign exchange (FX) gains, with the Thai baht strengthening by around 2% from the start of the quarter to date (QTD) to THB 31.9 per US dollar, as Luang Prabang power plant holds USD 500 million in loans. Therefore, the securities company maintains a “BUY” recommendation on CKP, with a target price of THB 4.40 per share.
Mr. Thanawat Trivisvavet, Managing Director of CKP, previously stated that in 3Q25, water inflows at Nam Ngum 2 and Xayaburi hydropower plants increased seasonally. Combined with Thailand’s policy rate cuts in the first half of this year, these will help reduce interest costs and support CKP’s overall performance to deliver continued growth in the second half of the year.
