KGI Securities maintains an “Overweight” rating on Thailand’s power sector, citing the sector’s fit for anti-commodity, defensive, and clean energy thematics, with GULF highlighted as a Top Pick stock.
According to the brokerage, large power players would outperform small ones in 2023 due to their superior growth, diverse experience, business ties, and stronger balance sheets with better credit ratings.
During the interest rate upcycle, recession worries, and inflation, all of these should result in solid growth with competitive costs. Gulf Energy Development (SET:GULF), which stands out for its strong fundamentals, is KGI’s top recommended stock, followed by Global Power Synergy (SET:GPSC) and B. Grimm Power (SET:BGRIM) on roaring-back results and trading against external variables.
The sector should continue to enjoy a positive re-rating if upcoming Power Development Plans (PDPs), 2023 roaring-back earnings, falling energy prices, carbon credit, and tailwinds from external factors (oil price, bond yields, and US$/THB) continue to tilt toward KGI’s views.