Kasikorn Securities (KS) has a slightly positive outlook on Gulf Development Public Company Limited (SET: GULF) after its analyst meeting, as the company outlined solid growth strategies and resilient financials for the near term.
Over the next 1-2 years, GULF will concentrate on developing existing projects, particularly in renewable energy. Key initiatives include the phased rollout of 600MW in solar farms starting in the fourth quarter, along with approximately 100MW in waste-to-energy projects.
GULF’s growth over the next five years is expected to be driven by mergers and acquisitions of local renewable energy ventures—especially those that have been tendered but not yet constructed. The company’s strong resources and expertise in project funding and management position it as a preferred partner for project owners seeking capital or joint ventures.
Management anticipates limited new tenders for renewable power projects in the next three to four years, citing the electricity grid’s restricted remaining capacity after the commissioning of current developments.
For the second half of 2025, earnings prospects are upbeat. While GULF won’t receive dividends from KBANK as it did in the second quarter, profit contributions from its expanding data center business and the Jackson project in the U.S.—which recently saw a tariff adjustment—are expected to provide strong support.
GULF is also moving forward with a THB 30 billion debenture issuance, benefiting from low interest rates of just 1.8-2.0%. With a debt-to-equity ratio at a healthy 0.9x, the company still has significant headroom to take on up to $5 billion in additional debt before reaching the pre-INTUCH merger level of 2x.
Additionally, natural gas prices are expected to decline in the second half and next year, possibly dropping below THB 300 per mmBTU. However, since GULF supplies 94% of its electricity to the state utility with nearly full cost pass-through, the risk from fluctuating gas prices is minimal.
As a result, Kasikorn Securities maintains a ‘Buy’ recommendation on GULF, with a price target of THB 61 per share.
