Broker cheers "buy" BCPG to expand into battery-EV business Mr. Teethanat Jindarat, Director of Securities Analysis Department of Yuanta Securities (Thailand) said that the outlook for 4Q21 normal profit slowed down from the previous quarter. and the same period last year Because it has passed the high season of the hydroelectric power plant in Laos. and even though the company has recognized additional revenue from commercial electricity distribution (COD) However, the proportion of revenue from hydroelectric power plants is quite high, thus the COD does not compensate for the seasonal factor.
While in the year 65, earnings forecasts will slow down slightly. Compared to the year 64 or expected at 2,213 million baht from the previous year expected at 2,224 million baht from some adders that have expired. resulting in lower profit margins However, BCPG still has the opportunity to grow. from a company that has already invested to step away from the power plant For example, it has invested in VRB Energy Inc. (VRB), a holding company incorporated in the Cayman Islands. and has subsidiaries in the People's Republic of China comprising research, development, production and distribution of energy storage systems in the type of Vanadium Redox Flow to expand investment into energy storage systems (batteries) business.
The battery type Vanadium Redox Flow is a relatively new technology and have
high growth potential which is currently used in China. This is in line with
Chinese law that every renewable energy plant must have a battery grid to support the power plant's power efficiency. This will be a
positive effect of VRB Energy based in China.
In addition, BCPG also announced the establishment of a subsidiary in Taiwan in the last 4Q21, considering Taiwan as a country with a high renewable energy potential. And the goal is to have the country's electricity generation from renewable energy to be 20% of the total by 68, the government has created incentives for investors. to set up a power plant in the country At the same time, the company It is in the process of developing 4-8 power plants in Taiwan with a capacity of 170 megawatts (MW). Initially, the electricity cost should be around 5.20-5.60 baht, and there is a 20-year Power Purchase Agreement (PPA) which is expected to be very clear. Increase in the second half of the year 65, which is not included in the projection. Since it is unclear about the location of the power plant and the electricity cost, if it can be done, it will be an upside to the analytical department's target price.
The Company is also studying the possibility of investing in additional batteries such as lithium-ion batteries for electric vehicles (EVs) that may be jointly invested with Bangchak Corporation Plc. (BCP).
Still recommends to buy with a target price of 18.30 baht if the power plant project in Taiwan is clear. It is expected to be an upside to that price.
SBI Thai Online Securities stated in the analysis that trend to reduce global warming And support for the use of electric vehicles (EV) by the government will be a positive factor for the shares in the clean energy power plant sector. Currently, BCPG has a clean energy power plant project with a COD of 503.1 MW and is under development for another 470.9 MW, representing a power. Total production 974 MW, in 65, there will be about 49 MW of power plants that will gradually start commercial operation, such as Komagane Solar Power Plant with a capacity of 25 MW (expected to start supplying electricity within the first half of the year), power plant Yabuki Solar with a capacity of 20 MW (expected to start supplying electricity within the first half of the year) and solar power projects installed on Chiang Mai University roof 4 MW (expected to start supplying electricity by the end of this year)
At the same time, BCPG has set an investment budget (CAPEX) year 65 at 27 billion-44 billion baht to invest in clean energy power plant projects abroad. It will focus on doing M&A. The company sees Taiwan as an attractive country because the government supports clean energy power plants to reduce dependence on electricity generation from nuclear power plants. In addition to that, the company has expanded its investment. Enter the energy storage battery business, EV Charging business and Smart City Planning business with an investment budget of approximately 9 billion baht.
Looking at the next phase of growth for BCPG will come from investments in clean energy power plants in foreign countries, mainly focusing on doing M&A. As for the New S Curve business, the company continues to invest in both the battery business. Energy Storage, EV Charging Business and Smart City Planning Business
Kasikorn Securities stated in the analysis that BCPG reported to the Stock Exchange of Thailand. that the Board of Directors of the Company has a resolution that BCPG Indochina Company Limited (BIC), a subsidiary in which BCPG holds all shares can purchase 25% of ordinary shares of Nam Tai Power Sole Company Limited (Nam Tai), a company registered in Lao PDR, from Phongsubthavy Group Sole Company Limited (PSG) for a total amount not exceeding USD 32 million from Invest in Nam Tai, the company will be entitled to economic development and Operate 50% of the 220 kilowatt (KV) transmission line and substations from the Nam San 3B project in Lao PDR to connect to the Vietnamese Electricity Authority (EVN) at the Lao-Vietnam border.
Benefit from this Agreement 1. It will provide electricity transmission infrastructure for the Nam San 3B project, which will allow the hydroelectric power project to supply electricity to EVN from current sales to EDL, thereby helping to obtain value 2. Expanding into the transmission line business from the current focus on renewable energy power plant projects. which will help generate income In addition to the service fee for the use of the electric distribution system (Wheeling Charge) from the power plant operator who wants to supply electricity to EVN, the 79-kilometer transmission line will be the infrastructure for the power plant with capacity. Not more than 800 MW and 3. Generate additional net profit It is expected that this investment will generate profits of 16-23 million baht, based on demand. Utilizing power transmission systems up to 600-800 MW, this project is fully funded from internal cash flow and a PIRR of 8. We have therefore raised our 2023-68 earnings forecast by 1%, 2%, 1% to 1.7 billion. baht, 1.2 billion baht, 1.8 billion baht to reflect this investment
4Q21 earnings outlook We expect net profit to increase from the same period last year. but decreased from the previous period which growth from the same period last year likely from the expansion of production capacity from the start of production 27 MW Chiba 1 Solar Power Plant Project in Japan At the beginning of Nov. This will result in total production capacity increasing 5% y-o-y to 552 MW, while net profit is expected to decline from 3Q21 as the last quarter is normally the off-season for power plants. Hydropower, therefore, management expects the electricity grid to drop to 57% in 4Q21 from 85% in 3Q21.
Maintain BUY with a target price of Bt17.00. Proceeds from the capital increase in 4Q20 are expected to be used to increase production capacity. This will be a key growth driver in the long term. The management plans to allocate a budget of 45-46 billion baht to power plant projects other than those currently under development and support plans to achieve the new S-Curve goals.
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