GUNKUL’s share gained over 2% at the opening bell on Wednesday; analysts expect 2Q22 earnings to improve on wind turbine and EPC businesses.
The share price of Gunkul Engineering Public Company Limited (SET: GUNKUL) rose THB0.05/share or 0.88% to THB5.70/share as of 15.50 hrs. local time in Thailand, with a trading value of THB511 million.
KTBST Securities reiterates a BUY rating on GUNKUL with a target price of THB6.45 per share based on SOTP, citing its optimism about GUNKUL’s earnings outlook following the guidance at an Opportunity Day yesterday, as all business divisions have experienced a favorable improvement.
First, the wind turbine division is highly likely to generate higher electricity YoY given a relatively stronger wind flow, thus far, while the company aims to increase wind power capacity by 100-150 MW by YE2022E. Second, the EPC business has maintained a 2022E revenue target of THB2.5-3.0 billion amid a sizable backlog of THB4.5-5.0 billion.
Last, the hemp-cannabis business has been on track with 1) a JV with THCG to open an alternative medical clinic, and 2) CBD sales in negotiations with several partners, some of which have made orders.
KTBST thus reckons that 2Q22 earnings will improve significantly QoQ as 1) the wind turbine division has benefitted from a stronger wind flow, and 2) the EPC business is likely to enjoy higher revenue in the aftermath of a low season in the first quarter of years. Adding to positive factors, the hem-cannabis business has joined hands with several partners and thus orders have gradually flowed in.
