B.Grimm Power Public Company Limited (BGRIM) expects to boost its earnings in 2Q21 as revenue from solar projects in Vietnam is likely to recover significantly in this quarter. Additionally, electricity sales to industrial customers in Thailand are projected to rebound as the Covid-19 crisis eases.
BGRIM is, however, still threatened by a growing natural gas price that is in line with oil prices. Overall, analysts predict revenue growth in 2Q21 will outweigh this issue, and the quarter’s results shall be better than the quarter earlier.
Phillip Securities expects that BGRIM’s revenue will expand in line with capacity expansion in 2022-2023. Revenue in 2021 continues to grow due to the return of industrial electricity sales following the improvement in the COVID-19 situation. However, rising energy prices will erode the margin, but will be offset by the development of LNG projects beginning later this year, resulting in normal profit growth of 16% and 21% in 2022 and 2023, respectively, up from 7% in 2021.
BGRIM will enjoy the rest of the year acquiring new projects. Numerous projects are planned to be completed in 2H21, including 1) two wind turbines in South Korea with a combined capacity of 170MW. 2) Wind turbines (200MW) in Vietnam and an LNG-to-electricity project. 3) A Malaysia-based deal (200-250MW). 4) Solar roof project in the Philippines. 5) Oman-based projects (30MW).
As a result, Phillip Secs. forecast the revenue of BGRIM will remain healthy, thus recommending “Speculative-Buy” with a target price of 50 baht.