FSS International Investment Advisory Securities (FSSIA) stated in an analysis that RATCH Group Public Company Limited (SET: RATCH) released its financial results for the fourth quarter of 2025, reporting a net profit of THB 775 million.
This marks a significant 64.3% decline quarter-on-quarter, although it represents an increase of 20.8% year-on-year. For the full year, the company delivered a net profit of THB 6,220 million, a modest 1.5% annual growth.
This outcome fell notably short of both the securities firm and the market’s expectations, primarily due to a special item: a THB 609 million impairment provision for heavy oil machinery at the RG power plant, whose PPA (Power Purchase Agreement) has expired.
The QoQ profit contraction was primarily attributed to seasonally lower equity income from hydropower projects and reduced electricity sales revenue from the RPE power plant, following a transition to a new PPA. Additionally, equity income from the SP power plant in Australia decreased due to the appreciation of the Thai baht against the Australian dollar and the US dollar, leading to lower EBITDA from the Australian portfolio.
Furthermore, SPP (Small Power Producers) plants saw a drop in revenue as the feed-in tariff (Ft) declined more sharply than gas prices, while SG&A (Selling, General & Administrative) expenses rose 53% QoQ but fell 7.1% YoY.
The stronger YoY profit was mainly driven by the full-year recognition of revenue and profit from Hin Kong Power Plant (HKP) Unit 2, which began operation at the start of 2025.
Equity income from associates also fell QoQ, reflecting lower contributions from hydropower plants NN2 and PNPC as the seasonal benefits subsided.
Looking forward, FSSIA maintains a positive outlook for RATCH, projecting a 2026 net profit of THB 6.9 billion, a 12% increase year-on-year. The growth is expected to be driven by increased contributions from Ratchaburi Power Company Limited (RPCL) after the company upped its stake by 15.6% at the end of 2025, as well as new renewable energy plants with an estimated added capacity of 200 MW, anticipated to reach COD (Commercial Operation Date) within 2026.
FSSIA reiterates its “BUY” recommendation, with a target price of THB 34.8 per share. The current share price is trading below book value (BV), offering an attractive estimated dividend yield of 5.4% per annum.
