Kiatnakin Phatra Securities (KKPS) has adopted a more optimistic stance on Thailand’s utility sector amid advancements in the Green Energy Transformation, particularly with the emergence of direct power purchase agreements (PPAs) facilitated by data centers and anticipated increases in generation capacity under the forthcoming Power Development Plan (PDP2026). Updates to operating assumptions and the inclusion of direct-PPA contributions from 2029-2030 have prompted KKPS to raise profit forecasts for 2027-2030 by 12-26% for GULF, 6% for GPSC, and 15% for BGRIM on average.
A draft of PDP2026, targeted for release by September, could potentially unlock further capacity and lead to a sector-wide valuation reassessment. These potential capacity gains are yet to be incorporated into KKPS forecasts and target prices, indicating additional upside for the sector.
KKPS has raised its price objectives to THB 75 for GULF, THB 60 for GPSC, and THB 25 for BGRIM, reflecting the updated estimates, direct-PPA impacts, and a valuation roll-forward to year-end 2027. GPSC has been upgraded to ‘Buy’, with the same ratings reiterated for both GULF and BGRIM. GULF is considered to hold the strongest position for potential upside under PDP2026.
The analysis factors in direct-PPA capacities of 2,000MW for GULF, 500MW for GPSC, and 300MW for BGRIM, with these additions expected to contribute from 2029-2030. The valuation uplift from these PPAs is estimated at THB 4.59 per share for GULF, THB 3.50 for GPSC, and THB 1.45 for BGRIM. Project IRRs range from 12.9% to 18.0%, depending on project scale, financing, and execution. With Thailand’s data center electricity demand potentially reaching 9GW by 2036, further opportunities may arise beyond current forecasts.
Future capacity awards from PDP2026 may offer added potential not yet reflected in analyst targets. KKPS suggests that access to competitive financing, favorable procurement costs, and established execution capabilities will be key in upcoming project bids. A reduction in the sector’s beta, from 1.32x in 2023-24 to 1.1x projected for 2026, could also enhance value through reduced cost of equity.
Current forecasts indicate attributable capacity will grow at a 2026-2030 CAGR of 16% for GPSC, and 6% for both GULF and BGRIM, with new PDP awards expected to further accelerate sector growth. Historically, previous PDP announcements have marked inflection points for utility valuations, leading to notable outperformance and PER expansion for the sector in the months that follow.
