DAOL Securities (Thailand) has highlighted in its latest analysis that CK Power Public Company Limited (SET: CKP) is poised for operational growth in the first half of 2026 compared to the same period last year.
This anticipated increase is primarily driven by an above-average water inflow, a result of upstream dam releases from China, notably from the Xiaowan and Nuozhadu dams. The enhanced water availability is expected to support hydroelectric production, especially from the Xayaburi Power (XPCL) and Nam Ngum 2 (NN2) projects.
However, for the second half of 2026, DAOL projects a softening hydrological outlook as the region transitions into an El Niño phase. This climatic shift is likely to lower water volumes in the Mekong basin, reducing hydroelectric power output accordingly.
The scheduled maintenance shutdown of the BIC1 power plant in mid-2026 will further pressure second-half earnings in the short term. The planned outage will temporarily decrease the plant’s availability, resulting in a partial loss of electricity and steam output, while fixed costs remain. This will reduce plant utilization rates and the profitability of cogeneration facilities, although DAOL views this as a temporary operational impact.
Regarding profitability metrics, CKP’s gross profit margin (GPM) in 2026 is expected to ease slightly to 27.4%, down from 27.8% in 2025. This reflects the expected decrease in water volume during the second half of the year, as well as persistently high natural gas costs. Nevertheless, DAOL notes these factors are transitory since adjustments of the feed-in tariff (Ft) should gradually incorporate higher costs, supporting margin recovery over time.
DAOL’s current forecasts estimate normalized profits for CKP at THB 1.8 billion in 2026 and THB 1.9 billion in 2027. This outlook represents a 23% decline in profit for 2026 compared to the previous year—largely due to a high base in 2025 and temporary pressures from softer hydroplant revenues, the BIC1 shutdown, and high gas prices—followed by a 3% rebound in 2027.
Despite these short-term challenges, the brokerage maintains that the headwinds facing CKP are temporary in nature and do not signal any structural changes to its fundamental business. The firm expects earnings to recover in 2027, driven by the normalization of plant operations and an improved hydrological outlook.
DAOL Securities has reiterated its ‘Buy’ rating on CKP with a 2026 target price of THB 3.00 per share, based on a discounted cash flow (DCF) methodology, assuming a WACC of 6.4% and a terminal growth rate of 1.5%. This target implies a 2026 PER of 13.6 times, which is one standard deviation below the five-year average.
Meanwhile, the current share price is trading at just 10.4 times 2026 earnings, or two standard deviations below the five-year average, with a PBV ratio of only 0.6 times. This valuation reflects an attractive entry point for investors, according to the analyst.
