Analyst Expects a 30% Full-Year Earnings Growth from BCPG, Raising a Target Price to ฿17

In 2021, Capital Nomura Securities (CNS) expects BCPG Public Company Limited (BCPG) to earn 2,484 million baht, up 30% from the same period last year. This is due to 1) three Japan-based solar farms (65MW) that are scheduled to begin COD in the second half of 2021, and 2) new 18,000 million baht projects (mostly are the projects that would generate profit immediately).

Valuation: BCPG is traded at 18x PER21F (diluted EPS), with upside potential from new projects and an annual dividend yield of 3-4%.

Catalyst: Yesterday’s drop in US bond yields and the potential of Thailand’s policy rate being dropped to 0.25% at the next meeting in September have prompted positive sentiments to  the energy stocks, in particular laggard stocks like BCPG. This year’s increased drainage from China is also helping hydroelectric power plants expand steadily in 3Q-4Q21 compared to the same period last year, and new projects that the company plans to spend (1.8 billion baht) in the rest of 2021 will generate profits as soon as the transaction is completed.

So, CNS has given a “BUY” recommendation on BCPG with a target price of 17 baht.