BANPU: the Sunset of Coal Business

Banpu Public Company Limited (BANPU) is a pioneering energy company to operate business in coal, which is now being challenged by many significant disadvantages: the impact on environment, high level of carbon dioxide, etc., resulting in downside of coal consumption…

BANPU has been seeking for business expansion in order to offset the decline in coal business.

Primarily, BANPU in 2019 penetrated the electric vehicle (EV) business through its subsidiary Banpu Infinergy Company Limited (BPIN) by investing USD 20 million equivalent to a 21.50% stakeholding in Japan’s leading compact  EV developer FOMM Corporation.

BANPU then joined hand with Durapower Holdings Pte Ltd, a high-tech enterprise specializing in lithium-ion battery (LiB) and battery systems, to open a world-class lithium-ion battery factory in Suzhou, China. 

Recently, Banpu NEXT Co., Ltd, in which BANPU and Banpu Power Public Company Limited (BPP), a spin-off company from BANPU to operate power business, each held 50% shareholding, has acquired the 37.6 MW El Wind Mui Dinh operating onshore wind farm located in Ninh Thuận, Vietnam with transaction value as high as USD 66 million or approx.THB 2,065 million. 

The first time ever BANPU invested in wind farm…

BANPU and BPP will recognize the revenue of El Wind Mui Dinh from now onwards as the wind farm has already achieved COD since April 2019. The facility is entitled to the Feed-in-Tariff (FIT) of US cents 8.5/kWh and supplies electricity under a Power Purchase Agreement with Vietnam Electricity (EVN) for a period of 20 years.  

BANPU targets its energy generation business portfolio to exceed 6,100 MW by 2025

Furthermore, BANPU’s subsidiary namely Banpu North America Corporation (BNAC) has acquired a gas operatorship position in the Barnett shale, Fort Worth Basin, Texas, USA. The transaction was valued at USD 570 million or approx. THB 18,650 million.

As of present, the stock price of BANPU has decreased from THB 11.90/share at the end of last year with a market cap of THB 61,426 million to THB 5.75/share (compiled on Aug 4), a 51.68% drop, and has lost THB 33,294 million of its market capitalization to stan at 28,132 million.

Well…don’t know how far BANPU can go in the new direction, but wish you luck!