KGI Securities stated that B.Grimm Power Public Company Limited (SET: BGRIM) recently held its 1Q26 analyst meeting, with management reiterating several key strategic priorities as the company adapts to a shifting power sector landscape in Thailand. The meeting was marked by a neutral tone, while the outlook flagged both challenges and potential long-term catalysts.
A pivotal development discussed was the anticipated release of Thailand’s new Power Development Plan (PDP), expected to debut in 3Q26. The new draft is likely to raise renewable capacity targets by 50-70% compared to the PDP2024 draft, along with expanded gas-fired capacity. This shift is being driven by rising utility demand, particularly from data centers as evidenced by new BOI applications.
KGI also revised up its 2026 small power producer (SPP) gas price guidance to Bt330-350/mmbtu, higher than its earlier outlook and recent actuals, following a price spike from the Iran war. The elevated gas costs are expected to pressure core profit both quarter-on-quarter and year-on-year, despite partial relief from higher Ft rates and new IU capacities.
Financially, BGRIM plans to lower its net interest-bearing debt-to-equity (IBD/E) ratio to 1.4-1.5x by 4Q26, down from 2.03x in 1Q26. While this remains below its bond covenant of 3.0x and there are no immediate credit rating risks, the current leverage may constrain potential upside from new projects and affect investor sentiment. There are also questions about the feasibility of infrastructure fund plans and asset monetization strategies to address earnings gaps.
On the operational front, BGRIM has pushed ahead with adopting higher gas pass-through mechanisms in its industrial user (IU) contracts, reaching 50% penetration in 1Q26 and aiming for 70% by May 2026. This is intended to mitigate margin risk by transferring a greater portion of gas price volatility to customers.
KGI forecasts for 2026-28 core profit remain below consensus, reflecting conservative gas price assumptions. Nonetheless, second-half 2026 earnings are expected to see support from new capacity contributions, notably from the Nakwol 1 project (179MWe, 49% stake), helping offset weaker SPP performance.
Despite near-term risks from geopolitical tensions and inflation, KGI maintains its Outperform rating with a target price of Bt15.30, citing longer-term upside from BOI-driven utility demand and the evolving PDP framework.
