Ratchaburi Electricity Generating

For years, the sole reward for RATCH's shareholders had been dividends. This is changing. With a debt-light balance sheet and abundant internal cash flows, RATCH has a platform for growth. The good news is management has started to utilise it. Even better, growth should not come at the expense of dividends. We resume coverage with an OUTPERFORM rating and target price of THB58 (DCF-based, 6.5% WACC). Earnings/dividend expansion powered by new capacity and the further pursuit of quality growth could be re-rating catalysts, in our view.