At the end of the morning session on Tuesday, the share price of BCPG Public Company Limited (SET: BCPG) jumped by 11.30% or THB 0.65 to THB 6.40, with a trading value of THB 127.92 million.
Gulf Energy Development Public Company Limited (SET: GULF) rose by 1.33% or THB 0.75 to THB 57.00, with a trading value of THB 437.02 million.
Global Power Synergy Public Company Limited (SET: GPSC) increased by 1.46% or THB 0.50 to THB 34.75, with a trading value of THB 125.36 million.
B.Grimm Power Public Company Limited (SET: BGRIM) surged by 1.71% or THB 0.30 to THB 17.80, with a trading value of THB 139.65 million.
UOB Kay Hian Securities (Thailand) noted in its report the recommendation for investors to consider accumulating stocks in the power plant sector following a significant decline on Monday, seeing GPSC dropping by 8.1%, BGRIM falling by 7.9%, GULF sliding by 2.2%, and WHAUP contracting by 5.2%. The downturn was attributed to the announcement made by former prime minister Thaksin Shinawatra, regarding his plans to lower electricity tariffs to 3.70 baht per unit this year.
As per a report citing sources familiar with the matter, the government’s strategy to decrease electricity tariffs involves potential implementation of the following:
- Declining to renew the nearing maturity Adder contracts with private firms;
- Lengthening the repayment period for Ft to the Electricity Generating Authority of Thailand (EGAT);
- Extending the payment duration for natural gas with EGAT; and
- Asking Independent Power Producers (IPP) and Small Power Producers (SPP) to reduce their profit margins.
UOB Kay Hian Securities (Thailand) maintains a cautious stance, believing that the proposed reduction in electricity tariffs may be challenging to implement, especially given the lack of explicit confirmation from the government.
The analyst predicts that any tariff adjustments would likely focus on providing assistance to vulnerable groups, highlighting the improbability of such revisions if natural gas prices do not decrease. Furthermore, negotiating alterations to contracts with private power plant companies, many of which are publicly listed on the Stock Exchange of Thailand (SET), could also prove to be a difficult task.
However, despite the report casting a shadow over companies in the Thai power plant sector, the analyst views this scenario as a potential opportunity for stock accumulation.
Among the companies in the sector, BCPG is expected to be less affected, given that the company does not currently hold any SPPs, while the company’s earnings for 2025 are anticipated to grow by 20% year-on-year.
Similarly, RATCH and EGCO, companies with IPPs, are stocks worth monitoring.
GULF is another entity that is minimally impacted, given that over 75% of its portfolio consists of IPPs, while the company is expected to start recognizing more profits from ADVANC this year.
