Analyst Remains Bullish on “Energy Absolute” Performance from Strong Fundamentals and Earnings Growth

The share price of Energy Absolute Public Company Limited (SET: EA) bounced back in early session on Tuesday but still at a small margin compared to the loss from yesterday due to concerns about low cash flow and missing deliveries target in the third quarter.


EA closed at THB41.75 on Monday, marking a three-year low with a drop of THB3.25 or 7.22% with a trading value of 1,803 million baht, the highest in two months.

Bloomberg reported last week that the aggressive expansion into electric vehicles and batteries has triggered concern about debt burdens as the company spent billions to build new production facilities for batteries as well as electric buses, ferries and trains.

After the report, talks were circulated around the market, raising concerns of lower-than-expected deliveries of EV and the end could not meet its payment due to EA. A deficit of 690 million baht in trade accounts receivable at the end of the second quarter also piled up on investors’ concerns.


Mr. Amorn Sapthaweekul, Director of EA, told “Kaohoon” that low cash flow and negative  trade accounts receivable were due to the company stocking electric vehicles and battery, which accounts around 3.5-4 billion baht when combined.

“EA originally is a power producer that does not need inventory for its product, but the company started to invest in EV heavily this year, and that comes with higher stocks for EV-related products,” Mr. Amorn told Kaohoon.

As for the deliveries that said EA only shipped 40 vehicles in the third quarter, Mr. Amorn testified it as a false report. He pointed out that the company delivered more than 200 vehicles in the third quarter, mostly tractors, not EV buses.


Meanwhile, Beyond Securities also published its research paper yesterday, saying that it strongly believed that EA will not face any risks of liquidity or financial distress.

Beyond Securities believed EA’s operating cash flow will turn positive in 3Q23 onwards given the absence of financial support to Thai Smile Bus (TSB) in the forms of account receivable (THB7b as of 2Q23) and financial lease receivable (THB4.4b).

Beyond Securities stated that the market concerns on financial investment in EV and liquidity are greatly overdone. Once the 3Q23 cash flow result is released and the orders of non-TSB EVs to be delivered starting in 3Q23 is gaining pace into 2024, EA’s share price should return to reflect its strong fundamentals of high earnings growth from EV and battery ventures, which will reduce EA’s debts and improve its free cash flows at fast paces.

In addition, Beyond Securities maintained its “BUY” recommendation on EA with a target price at THB84.00 per share.

The consensus from Refinitiv priced EA’s target at THB75.95 per share.


The share price of EA rose as much as 3% in the morning session, but edging lower to close flat at THB41.75 per share as Thailand’s SET Index fell more than 1% due to unstable conditions in the global market.