KGI Securities (Thailand) (KGI), in its analysis, noted a 1Q26 financial result preview for Global Power Synergy Public Company Limited (SET: GPSC), indicating robust performance driven by strong operations in the Small Power Producer (SPP) segment and a reversal of foreign exchange (FX) impacts translating into gains for the period.
GPSC is expected to report a net profit of THB 1.6 billion for 1Q26, representing a 36% increase year-on-year (YoY) and a 4% increase quarter-on-quarter (QoQ), with a core profit of THB 1.4 billion—up 13% YoY and 6% QoQ (excluding FX gains). This core profit constitutes 24% of KGI’s full-year 2026 forecast.
The significant YoY improvement is attributed mainly to a positive swing in FX gains of THB 200 million (compared to a loss of THB 57 million in 1Q25), a reduction in coal inventory losses at the GHECO-One facility, liquidated damages claims of THB 167 million from the CFXD wind farm, robust performance from the Xayaburi hydro plant, and lower finance costs.
On a quarterly basis, the increase in core profit is likely driven by steady operations in the SPP segment, underpinned by healthy power and steam volume sales, seasonally lower selling, general, and administrative (SG&A) expenses, and reduced taxes. These were somewhat offset by the seasonal downturn at CFXD.
Total power sales volume, however, dropped 22% YoY and 28% QoQ, mainly because of a planned outage at GHECO-One, which lasted 88 days, resulting in the absence of an available payment (AP) of THB 10 million per day.
Despite this, SPPs outperformed Independent Power Producers (IPPs), with power volumes increasing 3% both YoY and QoQ from rising demand in the chemical sector, and steam output growing by 9% YoY and 6% QoQ. The Ft rate stood at THB 0.09/kWh—a 38% QoQ decline—while SPP gas and coal prices decreased by 13% YoY, but remained stable on a QoQ basis.
For the sequential quarters of 2026, KGI projects a decline in core profit for 2Q26 both QoQ and YoY, largely due to SPP margin compression as gas prices are expected to rise to approximately THB 350/mmbtu against an Ft rate of THB 0.16/kWh, coupled with reduced volumes.
Nonetheless, earnings are expected to recover QoQ in 3Q26, supported by Xayaburi’s high season and moderately improved SPP margins as gas costs decline, but may reach a yearly low in 4Q26, coinciding with potential domestic gas price increases (Dubai-linked adjustment with a lag), seasonal increases in SG&A, maintenance, and weaker demand.
Despite KGI’s 2026-28 core profit forecasts being 4–6% below consensus estimates, the brokerage still sees downside risk due to energy price volatility adversely affecting SPP margins.
While Asia LNG JKM prices have eased from a peak of $22/mmbtu to approximately $16/mmbtu, sensitivity analysis indicates that every $1/mmbtu increase in LNG price raises Thailand’s SPP gas cost by roughly THB 10/mmbtu. Should LNG prices exceed KGI’s 2026 assumption of $10/mmbtu, the full-year earnings downside could be as much as 17%.
KGI maintains a ‘Neutral’ rating on GPSC, with a discounted cash flow (DCF)-derived target price of THB 37.00 per share. While the major conflicts in Iran are believed to have peaked, residual effects on energy infrastructure are expected to keep Asia LNG JKM prices above the historical range of $9–11/mmbtu.
This suggests that, structurally, earnings and SPP margins are unlikely to return to previous highs, with valuations also expected to remain subdued as investors price in additional risk premiums amid the anticipated conclusion of the interest rate cut cycle. However, short-term trading opportunities may arise as geopolitical tensions ease.
