B.GRIMM Power Public Company Limited (BGRIM) affirmed the new site for 240MW BGPR1 & 2 would be in Ang Thong industrial estate (2,000 rai) after an acknowledgement from EGAT, targeting to be World Food Valley of Thailand and see strong demand from food producers.
BGRIM would invest 22 million baht at minimum to improve the sub-station. Separately, the extension scheme for SPP plants which will expire in 2019-2025 has not been finalized. This raised concerns for ABP1 which will expire in September, 2019. Management clarified that this plant has the option to extend by three years at same tariff structure. If the government chooses the 25-year replacement scheme, there will be sufficient time for the construction of new plants (normally 26 months).
Previously, BGRIM acquired an 80% stake in solar projects in Phu Yen province, Vietnam, with installed capacity of 257MW from Truong Thanh Vietnam Group Joint Stock Company. The project obtained Ministry of Industry and Trade approval and is in the process of securing a 20-year PPA with Electricity of Vietnam under contract capacity of 214MW. The project is targeted to commercialize in June 2019.
The incremental value is estimated to be about Bt1.4/share, based on 80% stake, COD in June 2019, EIRR of 12%, investment cost of about US$1.0mn/MW and tariff of 9.35cent/kWh. Given the stronger platform in Vietnam, an additional capacity there should be seen in the future. Besides the investment in Vietnam, solar rooftops to sell electricity to industrial users in Thailand could potentially provide more upside.
Various brokers give a positive view on BGRIM
Nomura : “BUY” TP at ฿31.10/share (upsied 21% excludes investment in Vietnam and Korea)
Maybank : “T-Buy” TP at ฿29/share
Krungsri : “Outperform” TP at ฿31/share
KGI : “Outperform” TP at ฿31/share