FSSIA Eyes GULF at THB60 after 3 Acquisitions in May to Crystalize Renewable Business

Gulf Energy Development Public Company Limited (SET: GULF) had made quite a number of announcements this month with big corporates in the market this month to expand its business range, including the establishing of a joint venture company with the world’s largest cryptocurrency exchange Binance.

The company kicked off the month with a report of THB 3,394 million of net profit in 1Q22, increased 107% from a net profit of THB 1,632 million in 1Q21, followed by an establishment of Gulf Binance to focus on digital asset exchange business in Thailand and related business.

The company later joined The Siam Cement Public Company Limited (SET: SCC) to engage in the production and sale of solar energy from rooftops to industrial users, Gunkul Engineering Public Company Limited (SET: GUNKUL) to jointly drive the nation’s investment and development of renewable energy projects, and entral Retail Corporation Public Company Limited (SET: CRC) to engage in the production and sale of solar energy from rooftops. 


FSS International Investment Advisory (FSSIA) stated that GULF’s renewable growth roadmap is now crystallising. Out of four joint ventures announced in this month, three JVs are intended to grow the renewable capacity by up to 1,000MW within 2022-25, according to management. The solar energy capacity will comprise both solar rooftops (from JV with CRC, GUNKUL and SCC) and wind farms, as well as other renewable projects related to energy innovation like microgrids and smart metres. FSSIA said that it believes GULF could announce additional JVs with other leading companies in waste-to-energy (WTE), both for municipal solid waste and industrial waste (IW) WTE power plants by the end of 2022.

Furthermore, FSSIA expected GULF in 2022 to secure additional power capacity growth from two power development plans (PDP) in Thailand and Vietnam. Under Thailand’s current PDP 2018 Revision 1, the renewable energy capacity is targeted to reach 18.7GW or 21% of total capacity by 2037. Most of the new renewable capacity will come from solar farms and rooftops (8.7GW), solar floating farms (2.7GW), wind (1.5GW), WTE-IW (44MW up to 200MW), and others (3.2GW). FSSIA expected the bidding for wind, solar farm, and WTE capacities to occur within 2022. Vietnam’s PDP 8 (2021-30E) with 43.9% renewable sources is set for 2030.

In addition, FSSIA maintained BUY rating on GULF with a target price of THB60 per share (SoTP). The firm noted that it thinks GULF is one of Thailand’s attractive power plays with a visible growth outlook in 2022-25.