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Banpu Public Company Limited (SET:BANPU) is one of the largest coal miners in Southeast Asia. It owns stakes in more than 20 coal assets around the world, including Laos, Indonesia, China, Australia and Mongolia. The company operates open-pit and underground coal mines, as well as coal-fired power plants. Banpu controls a roughly 15% stake in Ratchaburi Electricity Generating Holding (RATCH), which was spun off from state-owned electricity giant Electricity Generating Authority of Thailand (EGAT), and Lao Holding State Enterprise (LHSE), a state-owned enterprise of Lao PDR.
In addition, according to its long-term corporate strategy, Banpu is exploring renewal energy opportunities, including bioenergy, wind power and solar energy.
Banpu said on February 18, 2016, that its full year 2015 revenues were 84.65 billion baht, missing the 86.69 billion baht consensus estimate of 12 analysts, according to the Financial Times. About 92% of its total revenues came from coal sales. The company posted full-year 2015 losses of 0.594 baht per share, missing the 0.179 baht per share profits consensus estimate of 12 analysts, due to declining global coal prices. Coal prices have fallen 62% since 2011, and 18% in the past year, according to the U.S. Energy Information Agency (EIA).
In late February, the company said it plans to buy at least one coal mine near its existing operations at Kalimantan in Indonesia later this year, in a bid to save costs and boost earnings growth.
From our technical viewpoint, BANPU shares have been moving in a descending broadening triangle chart pattern with near-term head resistance at around 18.50 baht per share and near-term support at around 14.50 baht per share. The stock could be under selling pressure, as the company said on March 11 that it will issue up to 2.58 billion new shares to increase its registered capital to repay debt and reduce its interest burden, according to the Bangkok Post. Another concern is that coal prices won't rebound anytime soon, based on supply surpluses.
According to the Financial Times, the consensus amongst 12 polled investment analysts covering BANPU gave the company a Hold rating, with the median 12-month price target of 20 baht per share.
Disclosure: No position and no recommendation. |
