Morgan Stanley noted in its report that Gulf Energy Development Public Company Limited (SET: GULF) is positioning itself as a leading player in infrastructure, targeting a robust compound annual growth rate (CAGR) of 20% from 2024 to 2027 across sectors such as power generation, artificial intelligence, satellites, and gas supply chains. With its strategic focus on high-quality projects and opportunities, the company is emerging as a top-tier contender in global utilities.
The analyst stated that amid worldwide concerns over energy security, there is a surge in interest from global energy companies to leverage Southeast Asia’s abundant resources. This interest is fueled by diverse factors including the emergence of AI, a forecasted global gas surplus, and accelerated energy transitions in the region. Southeast Asia boasts significant renewable resources, large gas reserves, a competitive manufacturing environment, and increasing policy support, with energy consumption growth expected to outpace global averages.
GULF is strategically positioned to almost double its electricity generation capacity by 2030, addressing the increasing energy demand. The company is at the forefront of Asian companies supporting natural gas dissemination and the power market expansion.
The analyst expects global power consumption growth to accelerate by 26% through 2030, which could drive wholesale prices up by 20-25% by 2026, boosting returns for power producers.
Financially robust, GULF is expected to leverage its cash-rich position to expand its reach as one of Southeast Asia’s largest infrastructure and utility operators. With telecom cashflows supplementing its revenue, the analyst predicts a consistent EPS growth rate of about 20% from 2024 to 2027. Existing power projects are anticipated to generate quality cashflows, supporting further expansion into new power plants, infrastructure, and AI data centers.
GULF, currently operating four satellites with approximately 60% of their bandwidth already contracted, has two more satellites on the horizon with around half of their capacity pre-sold. The company is expected to decrease its leverage as its investment pipeline slows down.
The analyst disclosed that GULF’s strategic use of leverage and partnerships has enabled rapid capacity growth, with expected returns on capital employed (ROCE) reaching roughly 8% by 2026, surpassing industry peers.
As one of the few companies globally ready for the energy market evolution, GULF boasts an impressive 8GW of gas power generation supplemented by 5GW of renewable energy capacity. Its LNG terminal and gas pipeline infrastructure solidify its role in the complete supply chain, alongside burgeoning downstream capabilities. With substantial operating cashflows and low-cost funding, GULF has achieved a notable 17% return on equity (ROE) previously and is poised for continued success.
Following these developments, Morgan Stanley gives an ‘Overweight’ rating for GULF, with a target price set at THB 69 per share.
