GUNKUL Reveals ฿1.2Bn Revenue-Worth of Hemp Project, Expecting High GPM amid Lower Costs

GUNKUL has revealed its phase 1 of hemp project that could generate as much as 1,200 million baht to its revenue per year.

The share price of Gunkul Engineering Public Company Limited (GUNKUL) surged 34.55% in March, rising from ฿2.72/share to ฿3.66/share as of the closing on March 17, 2021.


The recent rally was mainly due to the increase in revenue estimation as the company would have higher recognition from the full-year contribution of its additional140MW solar power plants that started the commercialization last 4Q.

Moreover, the report of GUNKUL planning to enter into hemp-related business added up to the positive momentum and pushed its share price even higher.


Mr. Somboon Aueatchasai, Chief Executive Officer of GUNKUL, through Kaohoon TV Online Program on March 17, 2021, revealed that the company projected a core revenue to grow from 8 billion baht in 2020 to 10 billion baht in 2021, contributing by the renewable power generation business (currently 627MW) around 4.8-5 billion baht, construction and EPC business around 3.5 billion baht with a backlog on hand of 9 billion baht, and the electrical system equipment distribution business around 1.5 billion baht.


As for GUNKUL’s interest in entering into a hemp-related business, Mr. Aueatchasai revealed that currently, the company has more than 3,000 rais of vacant land and the company is expecting to launch a pioneer project of growing hemp on 120 rais of land under its wind turbine.

Mr. Aueatchasai stated that the company is processing for a license of growing hemp, while expecting to sign an MOU with a company that can import hemp seed during the 5-year period that non-licensed corporates are not allowed to import hemp seed.

“The license for growing and extracting have easier process than the one for importing,” said Mr. Aueatchasai. “Thus, the company will focus on growing, extracting and selling.”


He added that the 5-year time frame will be the opportunity for payback and gain as much profit as possible. The gross profit margin should be high due to the import restriction and lower cost as the company would have an advantage on electricity pricing.


Revenue generation from full-cycle hemp business on 120 rais is estimated at around 1,200 million baht per year. The project should be completed in 3Q21 and the full revenue recognition should begin in 4Q21.


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