Energy: Alternative Energy

Energy: Alternative Energy

- Solar rooftop can proceed within one month
National Council for Peace and Order (NCPO) agrees to stimulate the economy by
supporting private companies that are ready for investment as soon as possible.
Ministry of Industry will readjust the issuance process of the permit for factory
operation (Ror Ngor. 4) to reduce time. Thus, 870 factories and investment
projects (including solar rooftop projects) waiting for the government's approval
will be able to proceed within 30-45 days.
- Positive factor for bid winners
This is a positive factor for alternative energy business, especially the companies
that won the auction for permission from the Ministry of Energy to run solar
rooftop business e.g. GUNKUL, BCP, WHA and DEMCO; they cannot start their
project because they are waiting for Ror Ngor. 4 to be issued. As Ror Ngor. 4 will
be approved by NCPO within 30-45 days, solar rooftop projects will be able to
proceed soon. Joint venture of SPCG (74.99%) and WHA (25.01%) was
terminated on September 2, 2013, but this is already included in our earnings
forecast and fair value. Though the positive factor has no significant effect on
GUNKUL and BCP's earnings forecast, it relieves concern about solar rooftop
projects. Also, these companies would have potential to win the next round of
auction for solar rooftop business permission. The first auction comprises only
39.34 megawatt of solar rooftop energy, 39.34% of total solar rooftop energy
permitted by the Ministry of Energy (100 megawatt total). GUNKUL and BCP are
possibly winners of the next round of auction.
- Speculate on GUNKUL, BCP
We recommend speculating on stocks that benefit from progresses on solar
rooftop projects: GUNKUL(HOLD: FV13B), BCP (BUY:FV36B), DEMCO(N/A),
WHA(N/A), UAC(N/A) and EPCO(N/A).