Ratchaburi Electricity
Play
Growing cash flow from Down Under Outperform - Maintained Share price: Bt 43.75 Target price: Bt 51.00
Ratchaburi Electricity Plc (RATCH) -posted disappointing earnings in 2011 because of RAC’s high-debt capital structure. But this should not be interpreted negatively given that cash flow was positive. RATCH’s growing cash flow and sustainable dividend yield remain key catalysts. We cut our earnings forecasts by 4-6% for 2012-13 to reflect RAC’s lower-than-expected earnings and introduce 2014 forecasts. Our DCF-based target price (WACC 6.8%) is lower by 12% but our Outperform rating is maintained. The coverage is transferred to Suwat Sinsadok.
