Analysts See Huge Upside in “GUNKUL” with over 800MW Clean Energy Projects on Hands

GUNKUL Engineering PCL (SET: GUNKUL)’s share price soared by almost 8% to ฿2.46 on Wednesday (1 Nov), after the price dropped to the 3-year low at ฿2.28 but reversed by the 380 million shares repurchase announcement with 1.1 billion baht. Mr. Somboon Aueatchasai, the CEO said the repurchasing price will not exceed 5-day closing price average plus 15% at the day of announcing, which is ฿2.79 per share.


Ms. Sopacha Dhumrongpiyawut, Chairman of the executive committee and the director of GUNKUL, said the company will use its excess liquidity to increase Return on Equity (RoE) and Earning per Share (EPS) through treasury stock management. The executive boards agreed to repurchase 4.28% of the total paid shares as they viewed the price was too low in contrast with good financial results in Q3.


The director was confident in the 2H23 performance to continue growing from the previous half, boosted by revenue from its domestic and international renewable projects. Meanwhile, the company will also gradually record income from its engineering, procurement and construction business that has 5,000 million baht of backlog.  Moreover, the company just won the 800 Megawatt wind energy auction while only utilizing 4 out of 12 Cannabis farming facilities, as GUNKUL is waiting for a clear sign from government policy about legalization of cannabis.


GUNKUL had ฿2.6 billion retain earning in Q2 of 2023 and had 6-month due liabilities at the repurchasing date around ฿1.5 billion. However, the company has an excess ฿11.2 billion for debenture issuance with BBB+ corporate rating from TRIS Rating.


Maybank Securities’s analyst said GUNKUL price was too low compared to its future value from 568 Megawatt of solar energy, 83.6 Megawatt of solar plus batteries and 180 Megawatt on wind energy.


Krungsri Capital Securities’s analyst recommend “BUY” GUNKUL as its fair price is estimated at ฿4.4 which has a 44% upside compared to the current level. GUNKUL has ฿1.7 billion cash and ฿7.9 billion retained earning, which is enough for its further operation after stock repurchasing. The analyst estimated GUNKUL’s P/E at 13.71x in 2023 and 12.56x in 2024.