BANPU Jumps over 5% as Coal Price Hit New High in Nearly 3-Year, Analyst Recomm. “BUY”

The share price of Banpu Public Company Limited (BANPU) rose ฿0.70/share or 5.34% to ฿13.80/share as of 15:48 local time in Thailand, with a target price of 1,639 million baht.

 

Krungsri Securities (KSS) has given a “BUY” recommendation on BANPU, with a target price of 18.00 baht per share. pointing out that a strong demand for power and tight coal supply have driven the NEX Index to  US$119/t, the highest since July 2018. 26% of BANPU coal sales has been fixed, suggesting a big upside for coal sales this year. KSS raised ITM’s ASP in FY21-23F to US$82/75/70 from US$65/67/67. 

The stock is under-owned given environmental concerns. KSS expected strong 2Q earnings, estimated at 2.5-2.8 billion baht, to prompt the market to upgrade the stock. Stretched balance sheet is a medium-term risk as net gearing was at 1.6x at end 1Q vs 1.75x debt covenant.