BANPU’s Share Up 3% after US Gas Price Again Hit Record Highs

The share price of Banpu Pcl. (SET: BANPU) accelerated by more than 3 percent during Tuesday’s morning session as a result of US gas prices again reaching record highs on rising electricity demand.

As of 10.42 hrs. local time in Thailand, BANPU’s share price rose to THB13.30 per share, an increase of THB0.40 per share, or 3.10 percent, with a trading value of THB1,975 million.

The national average price of gasoline in the United States on Monday surged from US$3.54 per gallon to US$4.86 per gallon, with ten states, including Michigan and Indiana, now hitting US$5 or more per gallon, according to CNN’s report. The prices in Washington DC are also above US$5.

Krungsri Securities raised its 2022-23 earnings forecast for BANPU by 7 percent and 9 percent, respectively, after including the XTO acquisition, scheduled to complete at the end of June 2022. BANPU will emerge to be a financially healthy company with gearing to drop from 1.1x this year to 0.7x next year. Recommend “BUY” with a target price of THB17.00.

BANPU plans to aggressively expand its shale gas business in the US, which will be funded by windfall profit from coal and an IPO. Growing gas business will reduce volatility in cash flow and regulatory risks associated with coal. QTD NEX has averaged US$382/ton, suggesting ITM’s 2Q ASP near US$200/ton vs US$151 in 1Q.