DAOL Securities (Thailand) wrote that CK Power Public Company Limited (SET: CKP) reported a net profit of THB 180 million for the first quarter of 2026. This represents a significant increase of 155% compared to the same period last year, but a decrease of 78% from the previous quarter. The figure was 6% lower than the market consensus but exceeded DAOL’s own estimate by 9%.
Total revenue for 1Q26 came in at THB 1.90 billion, representing a decline of 18% year-on-year and 21% quarter-on-quarter, attributed to a 23% drop in electricity sales from the Bangpa-in Cogeneration Power Plant (BIC), due to unplanned maintenance.
Additionally, lower average natural gas prices and a decrease in the average Ft for retail sales during the quarter led to downward adjustments in both the Energy Payment tariff and the electricity tariff for industrial customers, as well as the steam price per unit at BIC.
Gross profit margin (GPM) decreased to 17.6%, down from 19.8% in 1Q25 and 21.9% in the previous quarter. This reduction was attributed to a 36% year-on-year increase in wheeling charges, in line with higher electricity transmission volumes from the Nam Ngum 2 Hydroelectric Power Plant (NN2), as well as a 3% rise in concession fees, consistent with higher revenue from electricity sales at NN2. Project management costs also increased by 11%, mainly due to higher management fees from XPCL and LPCL.
Selling, general, and administrative (SG&A) expenses rose by 6% year-on-year, mainly due to higher consultancy, advertising, and public relations expenses. Coupled with the revenue decrease from BIC’s maintenance shutdown, the SG&A-to-sales ratio rose to 5.6%, compared to 4.3% in the same period last year. However, this ratio improved from 7.1% in the previous quarter due to seasonal effects.
A key support factor in CKP’s first-quarter 2026 performance was its share of profit from associates, which returned to a positive THB 232 million, compared to a loss of THB 7 million in the same period last year. This was supported by a 21% increase in water inflow, resulting in a 17% rise in electricity sales, as well as a weaker Thai baht, which positively impacted the US dollar-linked electricity rates.
Moreover, CKP recognized gains from revaluing financial liabilities due to lower interest rates and planned long-term debt repayments. This contributed to a THB 347 million increase in profit share from XPCL, which helped offset some of the foreign exchange losses from LPCL.
DAOL forecasts CKP’s normalized profits for 2026 and 2027 at THB 1.80 billion and THB 1.90 billion, respectively, representing a 23% year-on-year decline in 2026 followed by 3% growth in 2027. The profit in 2026 is expected to slow due to a high base in the previous year and temporary pressure from likely weaker performance of hydropower plants in the second half of the year, impacted by El Niño, as well as persistently high natural gas costs affecting gross margin.
However, profits are anticipated to begin recovering in 2027 with the return of normal operations at power plants and an improvement in water levels. As a result, the brokerage maintains a ‘Buy’ recommendation on CKP with a target price of THB 3.00 for 2026.
DAOL views that the main support factor for CKP remains the favorable water levels, which should help sustain full-year profitability. The recovery outlook for 2027 is clear due to the lower profit base. Current pressures on performance are seen as short-term and cyclical factors, which have already been largely priced in.
Furthermore, the stock, which has recently declined sharply, is now trading at a 2026 PER of about 10.9x—approximately two standard deviations below the five-year average—and a PBV of only 0.6x, making the current valuation attractive.
