KGI Securities (Thailand) has released an updated outlook on Gulf Development Public Company Limited (SET: GULF), pointing to resilient earnings but ongoing pressures from a sector-wide de-rating in the power industry.
KGI trimmed its 2026-27 core profit forecasts for GULF by 1%, reflecting the new gas price regime, with small power producer (SPP) gas prices now seen at THB 293/THB 274 per mmbtu, slightly higher than the previous assumptions. Despite this adjustment, GULF’s 2026 core profit is forecast to grow by 13% year-on-year, with nearly 70% of profits attributed to its holding in Advanced Info Service (ADVANC), which continues to show strong valuation momentum.
In contrast, GULF’s core power business faces moderate margins and slower growth amid the absence of a new Thai Power Development Plan (PDP) and growing competition in the sector. As a result, the market has assigned a weaker valuation to the power segment, with its implied value dropping to about THB 280 billion from THB 385 billion post-amalgamation in April 2025. In the period since, ADVANC’s shares have jumped by 28%, compared to just 4% for GULF.
For the fourth quarter of 2025, GULF is expected to report a record-high core profit of THB 7.65 billion, up 61% year-on-year and 5% quarter-on-quarter. Net profit is forecast at THB 7.9 billion, bolstered by foreign exchange gains. Key drivers on a quarterly basis include peak seasonality at ADVANC and the BKR2 wind farm, as well as lower financing costs, though these are partially offset by higher SG&A expenses and softer results from its Independent Power Producer (IPP) and SPP units.
Year-on-year, the profit surge is primarily attributed to GULF’s increased stake in ADVANC, rising from 19% to 40.44%, improved performance at the Jackson project, driven by higher capacity payments, and expanded operating capacity.
Looking forward to the first quarter of 2026, KGI expects further earnings acceleration from renewed industrial demand, declining SG&A expenses, increased contributions from the Jackson project, and a full-quarter impact from new renewable projects in Thailand totaling 354MW. Improving performance at ADVANC is also expected to support results.
KGI maintains an ‘Outperform’ rating on GULF, but with a slightly reduced target price of THB 54.00, down from THB 55.00. The firm projects a 10% year-on-year rise in 2026 EBITDA, driven by expanded renewables capacity and ongoing strength at ADVANC. Additionally, GULF is likely to commence semi-annual dividend payments from 2027 onwards.
