The share price of GUNKUL has been on a rise in the past few days, and today the company has revealed a new partner that could boost its process in hemp and cannabis-related business for revenue recognition as early as this year.
Mr. Somboon Aueatchasai, Chief Executive Officer of Gunkul Engineering Public Company Limited (GUNKUL), through “Kaohoon Jor Talad Program” on October 7, 2021, stated that the investment with THCG Group Company Limited (THCG) will give the company an advantage from THCG’s long and well-known profession in hemp and cannabis-related businesses who has the license and a contract with the Government Pharmaceutical Organization as one of the two largest distributors in volume.
THCG has a counterparty as the Department of Thai Traditional and Alternative Medicine (DTAM), which develops cannabis oil, cookies, gum and cream. The investment in THCG will expand GUNKUL’s business from only upstream and midstream to a full cycle, including downstream as well.
More importantly, joining with THCG will give GUNKUL a shortcut on the licensing process. The company is currently waiting for the license to import hemp seed for its 200-rai plot of land in Nakhon Ratchasima. However, THCG will give the company the edge on the growing process from its existing 7-8 license, while the current planting will be ready to cultivate in the next two or three weeks.
Mr. Aueatchasai expected the investment of 250 million baht for 50% shareholding in THCG will ultimately give a return in the bottom line around 100 million baht for the company, following the shareholding equity in THCG. In addition, GUNKUL should break even within two years or so.
The revenue recognition from this investment will be recorded as early as the next few weeks, which will be much faster than the earlier anticipation of GUNKUL preceding the business by itself, projecting a revenue recognition by the first quarter next year.
Lastly, Mr. Aueatchasai added that the company expected higher revenue from its power business this year due to more wind compared to last year, which is also slightly above the normal level.