Analysts Target BGRIM’s 2021 Earnings to Grow 17%, Giving “BUY” Rating at TP of ฿64

BGRIM is hoping to acquire new projects, targeting to increase the production capacity of more than 1,000MW this year. Meanwhile analysts estimated BGRIM to report a 2021 net profit of 3,230 million baht, an increase of 17% YoY, giving a target price at ฿64.00/share.

 

SCB Securities expected B.Grimm Power Public Company Limited (BGRIM) to have a high stability of revenue and cash flow from a long-term power purchase agreement (PPA) with the government in which it has more than eighteen years remaining on the contract. 

 

BGRIM’s 4Q20 earnings are forecasted to increase from the same period of last year due to 1) an improving electricity demand among industrial users, 2) a declining gas cost and 3) a production capacity expansion between 2020-2022, expecting to boost a profit growth rate at the average of 17% per year. 

 

For investment theme, SCBS rated BGRIM as Outperform with a target price of ฿64.00/share on a continued capacity expansion of both SPP and renewable power plant, and a plan of 7,200MW production capacity in 2025, thus believing the two factors will be significant to market sentiments. 

 

Meanwhile Phillip Securities projected BGRIM’s 2021 earnings to reach 3,230 million baht, an increase of 17% from the same period of 2020, mainly driven by a continued declining gas cost despite a higher gas import price. 

 

Although BGRIM still maintained its plan to increase the capacity by 1,000MW this year, but has yet reportedly upgraded any progress on the 700MW investment projects in Thailand and Malaysia and Vietnam’s wind farm project, therefore SCBS has downgraded the recommendation from BUY to “Accumulate” due to a disappointed on new projects, giving a target price at ฿55.00/share.