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Glow Energy Pcl (SET:GLOW), 45.19% stake owned by GDF SUEZ Energy (Thailand) Co., Ltd. and a 23.92% stake owned by GDF SUEZ Energy International Global Developments B.V., is a Thailand-based company with its core business in generating and supplying electricity, steam, and water for industrial uses. GDF SUEZ Energy (Thailand) Co., Ltd. and Overijssel-based, The Netherlands GDF SUEZ Energy International Global Developments B.V. are part of French multinational electric utility company Engie, previously known as GDF SUEZ. The company operates its independent power producer (IPP) business alongside cogeneration facilities, amounting to a total generating capacity of 3,207 MW of electricity and 1,206 tons per hour of steam, as of March 31, 2016.
Glow Energy’s core business is the generation and supply of electricity, about 1,525 MW, to the Electricity Generating Authority of Thailand (EGAT) under Thailand’s IPP program, and electricity to Electricite du Laos (EDL). The company operates its own production facilities, which are located in the Rayong and Chonburi provinces of Thailand, as well as in the Attapeu Province of Laos. The company also owns and operates a Glow Energy Solar power plant in the Rayong province with an installed capacity of 1.55 MW.
On April 29, 2016, the company reported first-quarter 2016 revenues of 13.65 billion baht, missing the estimate of one analyst of 18.77 billion baht, according to the Financial Times. The company blamed the 63.6% plunge in revenues received by Glow IPP from EGAT, under the IPP scheme. GLOW reported a first-quarter 2016 EPS of 1.89 baht per share, that exceeded the previous year’s fourth-quarter results by 26.85%, exceeding the estimate of one analyst of 1.61 baht per share.
For 2015, GLOW reported a dividend of 5.75 baht per share, which represented a 73.98% increase from 2014. The 14 analysts covering the company expect dividends of 4.96 baht per share for the upcoming fiscal year, representing a year-over-year decrease of 13.77%.
In mid-June, Mr. Pajongwit Pongsivapai, GLOW's chief financial officer, said "Over the next four years, Glow will look for new greenfield projects and mergers and acquisitions in both fossil fuel and renewable energy projects," … "However, we will not be involved with coal-fired power any more." According to the Bangkok Post, the company is also in talks with potential partners on investments in biomass, biogas and waste-to-power projects.
From our technical viewpoint, GLOW shares have been in a trading range between 70 baht and 94 baht per share since mid-2013. A bearish descending wedge has now emerged as the stock was unable to break out the 94 baht level earlier this year. The stock could head north again since it is traded along with the SET. Just a reminder, stocks in the Utilities sector tend to underperform the index in a risk-on trading environment, seeing that the sector is considered to be a safe haven.
According to the Financial Times, the consensus amongst 13 polled investment analysts covering Glow Energy gave the company a HOLD rating, with the median 12-month price target of 87 baht per share.
Disclosure: No position and no recommendation. |
