Glow Energy

2H12’s profit to grow notably again as supported by Gheco-one We are likely to revise down our net profit forecast and fair value in 2012 after GLOW reports 2Q12 lower than expected in order to reflect the aforementioned issue about Gheco-one. However, profit in 2H12 tends to grow notably again from 1) fully recognition of revenue from Gheco-one after it has resumed a commercial operation since 26 July 2012; 2) a gradual rise of Ft charge in June-August 2012 by B0.30/kWh and additional B0.08/kWh in September-December 2012 from B0/kWh in January-May 2012; and 3) an increase in utilization rate of a cogeneration power plant phase 5 from increasing demands from industrial customers as well as the EGAT that will purchase power by 74 MW according to the contract (firm) since June 2012 onward. Overall, the profit for FY2012 is still projected to grow from the previous year. Recommend only “hold to receive dividend” in short term, or switching to RATCH We reiterate our recommendation of “hold to receive dividend”. The current share price has got closer to 2012’s fair value, already reflecting the hope toward a commercial run of Gheco-one. Moreover, current PER in 2012 and 2013 at 14x and 11x is already higher than regional average. Therefore, we recommend investors to switch to RATCH which has lower 2012 and 2013’s PER at only 11.1x and 10.3x and has a growth potential in the next 3-5 years from its investment projects which have generated profit continuously.