Can Environmental-Friendly Business Change BANPU’s Years of Slump?
BANPU is trying to create a new identity with clean energy business as the demand for coal is slowly diminishing.
Banpu Public Company Limited (BANPU) has made some significant developments in the past few years as the company is trying to diversify to other businesses, but still in the scope of the energy business.
The example could be seen from the establishment of Banpu Infinergy Company Limited (BPIN) to penetrate the EV business while having Banpu Power Public Company Limited (BPP) to operate the electricity-related business through Banpu Next Company Limited.
Moreover, BANPU also advanced into the natural gas business, showing its commitment by acquiring the Barnett shale field in Texas, the USA, which could potentially be the pioneer to a natural gas power plant business.
This reflects BANPU’s effort in diversifying from coal business that has been labelled as polluting business to something more environmentally friendly.
The investment of BPP and Banpu Next is the beginning of the electricity business. The latest move is the acquisition of two solar power plants; Beryl and Manildra, in Australia with a production capacity of 110.9 MW and 55.9 MW, respectively in a total investment value of 2,332 million baht.
The expansion in Thailand might be a little difficult for BANPU due to the limitation on PDP. Shifting into overseas expansion such as in Japan, Vietnam or Australia through M&A might be a better idea.
The M&A deal gives BANPU an edge in continuing from what’s left, which would allow the company for revenue recognition right off the bat in exchange for a large amount of funds required in the investment.
Seeing these recent moves, BANPU’s core business in the future might not be about coal anymore.
Whether the business will flourish from these new investments is something to look forward to.
Nevertheless, the current share price of BANPU is way above pre-Covid level, trading at a new high in more than two years.
Truth be told. The reason behind BANPU’s surge in share price is none other than the rising coal price that recently hit a 10-year high.