Analysts Expect BANPU to Rebound in 2H23 on High Seasonal Coal Demand during Winter

Despite disappointing results in 2Q23, analysts believe Banpu Pcl. (SET: BANPU) will bounce back in the second half of the year on the back of an expected rebound in gas prices and a surge in coal demand during the winter.

In 2Q23, BANPU reported a net loss of $13 million, a reduction of $385 million, or 103%, from 2Q22. The outcome was much below the $16.5 million in net profits predicted by the Bloomberg consensus. The main causes were the year-long declines in natural gas and coal prices. In addition, the company recorded a $164 million bargain purchase gain from a merger of gas businesses in the United States in the same quarter a year ago. 

Even though 2Q23 was difficult for BANPU, Kiatnakin Phatra Securities predicted the company would bounce back in 2H23. KKPS forecasts that BANPU’s profitability will remain above its historical trend and that it will give high dividend yields next year in light of higher-than-average coal prices and a predicted rebound in US gas princess in 2H and 2024. 

For a diversified energy firm with significant exposure to transition fuels like natural gas, the brokerage deems BANPU’s 2024 P/E to be attractively cheap. Kiatnakin Phatra is keeping its “BUY” recommendation and THB13.30 price target on BANPU shares.