Yuanta Securities (Thailand) expresses a positive view for Banpu Public Company Limited (SET: BANPU) in the second half of 2026, citing favorable factors across all three of its core businesses. The company’s coal segment (Next-Gen Mining) is expected to improve year-on-year as the pressure from Indonesia’s coal export controls eases, allowing for increased sales volumes and a coal price rebound during winter, supported by low European stocks and potential LNG supply disruptions in the Middle East.
In the gas business (U.S. Closed-Loop Gas), although gas prices may not reach last year’s highs due to ample U.S. inventory, BANPU’s effective hedging and newly recognized sales from its investment in the Barnett shale assets will support earnings. For the power business (Power+), seasonal demand in the U.S. will drive higher electricity sales during the summer (Q3) and winter (Q4) peaks.
Looking ahead to 2027, Yuanta expects BANPU’s net profit to reach THB 6.7 billion, up 4% year-on-year, which would outperform the sector average, where many peers are expected to see lower profits after a high base year. This growth is underpinned by resilient coal prices—despite a potential easing of conflicts, LNG supply remains tight, and El Niño is expected to boost demand, with diesel costs also declining as geopolitical tensions ease.
The gas business is projected to accelerate as full-year contributions from Barnett come in and increased demand from data centers pushes gas prices higher. BANPU will also benefit from the absence of business structuring and advisory expenses that impacted 2026. Furthermore, there is potential upside if the company secures power purchase agreements with data centers, expected to become clearer by late 2026 or early 2027.
BANPU’s coal division is likely to remain strong in 2027, with a Newcastle coal price assumption at $115/ton. While this marks a slight year-on-year decline due to reduced geopolitical risks, prices are still forecast to stay elevated amid ongoing gas-to-coal switching, slow LNG recovery in the Middle East, and hydropower constraints induced by El Niño, prompting several countries to rely more heavily on coal.
The expansion of data centers is creating structural demand for U.S. Closed-Loop Gas. Over the medium to long term, the U.S. natural gas business is expected to grow, boosted by new LNG plants that could add 10-13 billion cubic feet per day over the next six years, up from the current 18.3 bcf/d. The rapid expansion of U.S. data centers intensifies the requirement for reliable gas-fired power generation, producing a notable structural shift. BANPU stands out among Thai-listed companies for directly benefiting from this data center boom through its fully integrated U.S. Closed-Loop Gas investments.
Yuanta maintains a ‘Buy’ recommendation for BANPU, with a target price of THB 19.00 per share. The short-term outlook is supported by Middle East disruptions and El Niño for coal, while the U.S. gas business holds promising medium- to long-term prospects. Profit momentum in 2027 is anticipated to outperform the sector, and valuation remains attractive, trading at 0.5x PBV (-1.1 SD) with shares up 12% year-to-date—lagging other upstream energy stocks, which have gained more than 30%.
