Analysts express optimism towards Gulf Energy Development Public Company Limited (SET: GULF) with a progress of the merger with Intouch Holdings Public Company Limited (SET: INTUCH), with share prices edging closer to their target of THB75 per share.
GULF’s share price saw a 2.25% uptick during the morning trading session on Friday, November 1, 2024. However, prevailing negative sentiments in the region weighed down Thailand’s SET Index, leading GULF to close flat in the morning session at THB66.50 per share despite an earlier gain.
Bualuang Securities (BLS) has rolled over GULF’s target price to THB75.00 by the end of 2025, incorporating the potential amalgamation into their valuation. The firm foresees no long-term growth impact in the event of a delay in renewable project bidding, expecting bids for the 2.2GW project in the first half of 2025 and the remaining 1.4GW later in the year. Moreover, the new Power Development Plan (PDP) is set to introduce an additional 10GW for bidding between 2026-27.
Each 1GW secured by GULF in solar power bidding is projected to bolster long-term profits by 3%, equivalent to THB0.25 per share added to the target price. Furthermore, winning bids for wind power projects could potentially yield a 10% profit increase per 1GW, translating to THB1.44 per share to the target price. Expectations lean towards GULF winning a minimum of 5GW out of the total 10GW in upcoming bids over the next few years.
Additionally, with a resilient baht, anticipated drops in gas prices by THB8-10/mmbtu could enhance GULF’s earnings estimate by 1%. Despite concerns over diminished electrical tariffs, BLS envisions a minimal impact, with prices likely to remain close to the current rate of THB4.18 per unit.
