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Electricity Generating PCL (SET:EGCO), 25.41% stake owned by EGAT, 23.94% stake owned by TEPDIA Generating B.V., and 19.43% stake owned by Thai NVDR Company Limited, as of September 6, 2016, is Thailand’s second largest private power producer and a holding company. EGAT is Thailand's leading state-owned power utility under the Ministry of Energy of Thailand. Amsterdam-based TEPDIA Generating B.V. is a 50-50 joint venture between Tokyo Electric Power Company, Incorporated (TEPCO) and Mitsubishi Corporation.
The company invests in Independent Power Producer (IPP), Small Power Producer (SPP), Very Small Power Producer (VSPP), Coal Mining, Operating and Maintenance (O&M) and Management and Administrative Services (Management Services), which include maintenance, engineering and construction services to power plants and other industries, and water and water pipe network services.
As of June 30, 2016, EGCO Group’s portfolio consists of 23 operating power plants, with a total contracted capacity of 3,991 MW in 5 countries including Thailand, Laos, the Philippines, Indonesia and Australia. There are 7 projects under construction and development with a total contracted capacity of 1,721 MW. EGCO Group’s power plants generate electricity using several fuel sources, such as natural gas, coal, biomass, waste, hydro, solar, wind, and geothermal.
Electricity Generating said on August 8 that its second-quarter 2016 revenues were up 5.46% year-on-year to 5.108 billion baht, compared to 4.46 billion baht during the same quarter 2015. The revenues, however, missed the 6.73 billion baht estimate of the one analyst following the company, according to the Financial Times. EGCO posted second-quarter 2016 earnings of 3.89 baht per share, up 46.24% year-on-year, but missed the 4.34 baht per share expectations of the one analyst covering the company. The company cited weak results due to a decrease in power generation and other businesses.
For 2015, EGCO reported a dividend of 6.25 baht a share, unchanged from 2014. The 12 analysts polled by Financial Times covering the company expect dividends of 6.49 baht a share for the upcoming fiscal year, representing a year-over-year increase of 3.76%.
In early September, Electricity Generating told Reuters that it expected a 2016 operating profit of 8 billion baht, up from last year due to rising capacity at home and abroad. The company is developing seven power plants that are scheduled to start commercial operations from late 2016 until 2019. It is looking for an opportunity to invest overseas, especially in Southeast Asia.
From our technical viewpoint, shares of EGCO have been bumping into the 200 baht level since July. If the stock is unable to break out, it could pull back to the 175-180 baht levels, the long-term trendline supports. According to the Financial Times, the consensus amongst 14 polled investment analysts covering Electricity Generating gave the company an Outperform rating, with the median 12-month price target of 220 baht a share, as of October 14, 2016.
Disclosure: No position and no recommendation. |
