After witnessing a notable 20% decline in its share price year-to-date, Maybank Securities (Thailand) (MST) has upgraded BGRIM to a ‘Buy’ from ‘Hold,’ citing that the current share price presents a compelling long-term investment potential.
The company is currently valued at 12.5 times its forecasted FY28 price-to-earnings ratio, a significant discount compared to its five-year trailing average of 19.8 times.
BGRIM is poised to achieve an impressive earnings per share (EPS) compound annual growth rate (CAGR) of 53% between fiscal years 2025 to 2028, driven by the commissioning of its ongoing projects in South Korea, wrote MST in its analysis paper.
Despite a downward revision in the target price for the end of FY25 from THB24 to THB20, reflecting adjustments in expected returns on South Korean green-field projects, the company shows robust growth prospects in renewable energy.
Projected to increase its power capacity with 922 megawatts from offshore wind farms slated for FY26-28, BGRIM is aggressively expanding into the renewable energy sector. This strategy aligns with a projected FY28 earnings by MST of THB4.1 billion, or an EPS of THB1.21, enhancing its attractiveness as an investment.
In a worst-case analysis, with a power tariff of THB3.7 per kWh anticipated from May 2025, the company’s earnings could face certain downsides; specifically, potential reductions in earnings forecasts by up to 22% for FY25. Nonetheless, market realities like Electricity Generating Authority of Thailand (EGAT)’s financial constraints and prevailing energy prices suggest challenges in implementing such a tariff, supporting BGRIM’s future earnings resilience.
Adjustments in earnings forecasts for FY25-26 reflect updated expectations in power tariffs, with anticipated declines of 25% and 26%, respectively. Current forecasts assume tariffs of THB3.98 for May-December 2025, and THB3.78 for the long-term in FY26.
Despite these revisions, BGRIM’s focus on renewable initiatives remains a key growth driver, positioning it as a strong contender in the energy sector.
