BGRIM Growth Continues in 2H/23, Bottom Line projected +500%

B.Grimm Power Public Company Limited (SET: BGRIM) released its guidance for the second half of 2023, expecting the business to outperform the first half.


Prospective growth is enabled by the following factors:


First, in the second half of the year, the cost of LNG, or the main cost in electricity production, is expected to drop to THB 350-360 per a million BTU.  This reduces the annual LNG cost to around 400-450 per a million BTU, resulting in a higher sales margin.

Second, a number of BGRIM Small Power Producers (SPP) are going to begin Commencement Operation Date (COD) later this year. Among those projects are BGPAT 2 and BGPAT 3, which have a combined capacity of 280 MW. Both plants will supply 90 MW of power to Electricity Generating Authority of Thailand (EGAT). Two solar plant projects in Malaysia will also begin COD in the fourth quarter.

Third, BGRIM will start realising revenue from its solar and wind farm projects in South Korea, which has already begun commercializing its services.

In addition, BGRIM will begin to supply power to new Industrial Unit (IU) clients in the third quarter. This year, the company hopes to sell 50-60 MW of power to industrial customers. 12 MW were sold in the first half, and more clients have already begun using BGRIM’s service in its current third quarter.

KGI Securities raised its forecast for BGRIM’s core profit by 48% due to the accumulation of positive news that might contribute to the company’s bottom line. The third quarter of 2023 is expected to be the most lucrative quarter of the year, as the SPP continues to perform exceptionally well, like it did at the start of the year. The new revision of BGRIM’s bottom line for 2023 THB 2.3 billion, up +506% from 2022.

The security firm maintains a BUY recommendation on BGRIM stock, with a target price of THB 42 by 2024. Note that BGRIM will issue a dividend payment of THB 0.18 per share, with an ex-dividend on August 28.