As per an analysis by Finansia Syrus Securities (FSS), the tone from an analyst meeting on Tuesday morning regarding Gulf Development Public Company Limited (SET: GULF) exhibited a slightly positive view after the company’s management provided updates on its outlook and ongoing projects.
On the big picture, GULF’s management noted that Thailand’s overall power industry continues to face pressure from the government’s cap on electricity tariffs, which remain set below 4 baht per unit.
Regarding the first phase of renewable power plant auctions—totaling 5,200 MW—GULF has signed all necessary Power Purchase Agreements (PPA). The second phase, under review by the Ministry of Energy (MOE), has now passed examinations, with all processes deemed fully compliant and legitimate.
The management added that any changes or proposals to lower electricity tariffs in future contracts could trigger legal actions from private sector participants. However, they expect a final resolution soon. Meanwhile, the direct financial impact of electricity price caps on GULF is limited, given the company’s smaller portion of Small Power Producer (SPP) contracts.
GULF is seeking approval to double its credit line from 100 billion baht to 200 billion baht, planning to issue additional corporate bonds. Following recent mergers, its debt-to-equity ratio is expected to decline from 1.8x to between 0.8 and 0.9x. The company said its investment in Kasikornbank (KBANK) is primarily for dividend yield, though it remains open to increasing its KBANK stake. If the holding surpasses 10%, approval from the Bank of Thailand (BOT) would be required.
Regarding projects, the first phase of GULF’s cloud and data center projects, with TikTok as a core client, has commenced commercial operations and will start recognizing revenue from August 2025. The initiative is forecast to contribute around 100 million baht per MW annually in revenue, translating to profits of 20-25 million baht per MW, per company estimates. This is also in line with FSS’ forecast.
Additionally, the management clarified that lower domestic electricity prices will not impact the data center business due to direct PPA structures and full utilities pass-through arrangements.
In Laos, the Pak Beng hydropower project has secured financial closure, while the Pak Lay project expects closure next year. Construction is ongoing at the Luang Prabang hydropower facility. Meanwhile, GULF’s LNG import project continues to grow, with 12 shipments already completed out of a planned 30. The company makes LNG purchases via traders to maintain flexibility, and the project’s success is viewed independently from ongoing government efforts to source additional US LNG imports for trade negotiations.
GULF is also actively managing its overseas power plants, with sales possible if attractive prices are offered. The Jackson Generation project is expected to deliver increased profits—rising to approximately $25 per MW per year from June, and up to $270 per MW next year.
The analyst expected GULF to report a net profit for 2025 of 25 billion baht, indicating 20% year-on-year growth, while also maintaining a ‘Buy’ recommendation for the stock.
