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October 8, 2020
187
GULF acquires 10% of INTUCH shares, and analysts expect a dividend of 700 million baht per year, and estimates that its electricity capacity in 2021 will grow another 42% to 4,200 MW.
According to Gulf Energy Development Public Company Limited or GULF has notified the Thailand Stock Exchange. (SET) that the Board of Directors has approved that the Company invest in ordinary shares of Intouch Holdings Public Company Limited or INTUCH for no more than 10% of the total issued and sold shares of INTUCH within the amount of 1.9 billion baht trading through the SET AND / or by any other means deemed appropriate under the laws and regulations of the Securities and Exchange Commission (SEC).
Recently, Ms. Yupapin Wangwiwat, Chief Executive Officer and Chief Financial Officer of GULF, revealed that on October 6, the company acquired 320.65 million INTUCH common shares, representing 10% of total shares.
At the same time, INTUCH has notified to adjust the shareholding structure of the company. The change is that GULF’s stake has increased from 7.99% to 10%, it is still INTUCH’s second largest shareholder, while its number one shareholder is still Singtel Global Investment with a 21% stake.
In addition, the GULF Board of Directors approved The Company established a subsidiary, Gulf 1 Company Limited, with a registered capital of 100 million baht, where the Company will hold 99.99% of the shares, which this subsidiary was established to operate in all forms of renewable solar business like solar farms. To the solar roof AND providing comprehensive maintenance services for said energy systems.
Thirtanut Jindarat, Securities Analyst at Yuanta Securities (Thailand), stated that initially it seemed Medium to increase the proportion of GULF’s investment in INTUCH is approximately 8% to 10% if the investment weight increases. Would have to ask for shareholder resolution again
However, this investment The company will receive dividends. It is expected to be around 700 million baht a year, which is why GULF insists that this INTUCH stake is a low-interest loan investment. And to invest in pieces that have higher returns In the long term, GULF may not sell its INTUCH shares or it may buy more. If the company maintains a solid financial position and it is likely that the INTUCH Group will expand its business in other areas of infrastructure. More also
Regarding the direction of the power plant business, at the end of July, GULF has a total installed capacity of 6,409 megawatts and a share of 2,959 megawatts, divided into 46 percent of the IPP plants. 42% of SPP power plants and 12% of alternative energy for domestic capacity account for approximately 90% of distribution to the Electricity Generation Authority (EGAT) and 10% of private customers, and EGAT’s clients increase to 95%. In 2027
According to the commercial power plant progressive start-up (COD) plan for projects with current portfolio, the proportional shareholding capacity will increase to 4,200 MW in 2021, up 42% and an average growth of 22% per year. 5 years in the year 2020-2025
While the normal 2021 gain is expected to grow 76% from the start of the COD of the first phase of the 1,325 MW IPP project of GSRC and the phase II of 1,325 MW that will be COD in 2022 and with the capacity of COD gradual underway. This will encourage GULF earnings to keep growing every year for at least 2027 or about 8 years from now.
With the current share price around Bt31, the 2021 P / E is 46.3x, but the PEG is 0.61x as normal profit is expected to grow 76% and the acquisition of a large power plant will reduce the P / E of GULF. Again, we see weakness as an investment opportunity. It also assumes a natural gas price of 260 baht per million BTU, with every 10 baht of gas price lower than assumed will have a positive effect on the target price of 1.50 baht per share.
