what happened:

On February 10, 2023, Global Power Synergy Public Company Limited (GPSC) reported a net loss of 436 million baht in 4Q22, worse than expected, due to fuel costs. (mostly coal) and special items (Amortization of Glow Energy Phase 2 at 270 million baht)

Despite the fully adjusted Ft of Bt0.9343/kWh, adjusted net profit was Bt21mn (down 99%YoY and 97%QoQ), impacted by higher fuel costs. Unplanned shutdown of GHECO-One and Glow Energy Phase 5 and lower profit share from XPCL (Hydro Power Plant) due to seasonal impact.

As for net profit in 2022, it was 891 million baht, down 88%, the worst since the company was founded. Due to the impact of high fuel costs and electricity prices that have not increased much.

How it affects:

GPSC share price increased 5.11%DoD to 72.00 baht, while SET Index increased 0.02%DoD to 1664.89 (as of February 13).

2023 earnings outlook:

InnovestX Research is more optimistic on GPSC’s earnings prospects as pressure from lower energy costs, with LNG prices, are expected to gradually rise. Lower after peaking in January 2023 and more gas from domestic sources. Coal prices are also expected to decline from $423 per tonne in 4Q22 to an average price of less than $300 per tonne in 2023.

The Solar Power Plant Business in India (AEPL) will turn profitable at Bt200 million in 2023 based on current operating capacity. recovering from a net loss of Bt301mn in 2022. Share of profit from a 25% stake in CFXD in 2023 is expected to be Bt100-Bt150mn, with the full capacity commercially operational by the end of 2023.

In addition, GPSC’s SPP Replacement (Glow Energy Phase 2) project has already commenced commercial operation in 4Q22. This project will help improve the overall efficiency of the SPP power plants. In addition to the benefits of joining forces with Glow SPP

As for investment strategy, InnovestX Research gives Outperform rating for GPSC with a DCF-based target price of Bt84/share. Despite the faltering performance in 2022, it believes the worst year has passed and profits. 2023 will make a remarkable recovery This is driven by higher selling prices and lower fuel costs.

As for the important risk factors that must be monitored are Fuel costs higher than expected Ft postponement, yields from new investment projects are lower than expected and changes in the law on greenhouse gas emissions.


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