Yuanta Securities (Thailand) wrote that Banpu Public Company Limited (SET: BANPU) is currently in the process of an amalgamation with Banpu Power Public Company Limited (SET: BPP). Under the proposed share swap ratio, one share of pre-amalgamation BANPU will be exchanged for 0.38242 shares in the new company (NewCo), while one share of BPP will be exchanged for 0.80208 shares in NewCo.
Both BANPU (pre-amalgamation) and BPP shares will be suspended from trading (marked SP) from July 17 to August 3, with trading in the new BANPU (NewCo) shares to commence on August 4.
The total shares of NewCo BANPU will be 4,049.6 million, with a par value of THB 10 per share. The initial market price for NewCo is estimated to be around THB 15 per share, though this will depend on the prices of BANPU and BPP as of July 15–16.
The amalgamation is expected to provide a modest improvement in the company’s financial metrics. Strategically, the restructuring aims to increase operational flexibility, reduce redundancies, clarify shareholding structures, improve management efficiency, and support future growth. Yuanta also sees enhancing stock valuation by reducing the holding discount associated with cross-shareholdings and improving overall business structure, as well as generating future operational synergies.
For the second quarter of 2026, BANPU’s performance is expected to improve both quarter-on-quarter and year-on-year, moving from a prior loss to a profit. While coal production costs have been affected by rising diesel prices, natural gas prices fell to $2.9/mmbtu during the period, down 15% quarter-on-quarter after winter.
Profitability improvements are expected to be supported by a 15% quarter-on-quarter rise in Newcastle coal prices ($137/ton), increased coal sales in Indonesia due to favorable seasonal weather, gains from hedging natural gas prices, and potential foreign exchange gains from a weaker baht.
Looking ahead to 2026 and 2027, the outlook remains positive for the company’s gas and power businesses in the United States, backed by expanded LNG production and growing demand from the data center and AI industries, which are driving higher electricity and natural gas consumption.
Coal prices are expected to remain strong due to continued demand as an alternative to LNG and delays in coal-fired plant closures abroad. FX losses are expected to decrease year-on-year due to a weaker baht. Meanwhile, news regarding proposed Indonesian coal export controls seen since May has yet to be detailed or implemented, with further clarity expected in 2027.
As a result, Yuanta maintains a ‘Buy’ recommendation on pre-amalgamation BANPU, with a target price of THB 7.70 per share, reflecting the anticipated short-term recovery in 2Q26 and ongoing favorable conditions for the gas and coal industries through 2027. The preliminary fair value estimate for NewCo BANPU is THB 19–20 per share.
The analysis suggests that every $0.1/mmbtu change in natural gas prices would affect BANPU’s annual profit by THB 400 million, while every $1/ton change in coal prices would impact profit by THB 200 million per year.
