Ratchaburi Electricity
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Winning its bid for growth OUTPERFORM - Maintained Share price: Bt 41.75 Target price: Bt 51.00
Ratchaburi Electricity Plc (RATCH)
We believe RATCH would be a favourite during the next round of IPP tenders, which could boost its capacity and earnings growth by 2015. Its strong cash flow from existing operations should help to accommodate this expansion plan. We expect earnings upside of up to 58% if RATCH wins two IPP blocks. This, coupled with its recently-announced Hongsa and Xepian projects, underpins our Outperform call and unchanged DCF-based target price (WACC 6.8%/LTG 3%).
