KGI Maintains ‘Outperform’ Rating for GPSC, Foreseeing Continuous Growth in 2024-25

KGI Securities has given an ‘Outperform’ rating on GPSC, following its strong capacity expansion that should perk investors interests for the long-term growth outlook for the company.

KGI stated that GPSC has achieved a capacity milestone of 10GWhe, operating at 6.7GWhe, with renewable energy (RE) accounting for 65% of its portfolio, mainly led by Avaada, of which the company held 42.9% stake. The company aims to enhance its RE capacity to 15GWhe from the current 6.8GWhe, representing a total capacity of 30GWhe (+200%). To support this growth, GPSC is diversifying its investments in key markets like India, Thailand, Taiwan, China, and Laos, alongside the implementation of an asset monetization strategy.

KGI Securities expected India to stand out from the aforementioned countries due to its high GDP growth rate and young population, which are expected to drive an increase in power demand.

Avaada is progressing well towards achieving GPSC’s renewable energy (RE) targets. While substantial profits may take time to materialize due to the ongoing development phase of Avaada’s scalable operations, the company’s focus on reducing debt costs and success in securing bids for new capacities point towards a positive future outlook.

KGI estimated GPSC’s 2024F-2025F net profit forecasts to rise by 27% YoY and 18% YoY respectively, primarily attributed to increasing SPP margins, Avaada’s growth, and enhanced performance of a wind farm in Taiwan (149MWe) expected to be fully operational in June 2024.

The firm maintained an ‘Outperform’ rating for GPSC, with a target price of THB 58.50 per share.