Alternative Energy

Alternative Energy   

- Government purchasing solar energy officially 

On January 13, 2014, the Energy Regulatory Commission (ERC) announced a purchase of additional 800 MW from solar power plants for local government organization and agricultural cooperatives in the Royal Thai Government Gazette, aiming to boost solar power generation to meet the government's Alternative Energy Development Plan (AEDP) target of 3,000 MW within 2021. The names of power companies accepted for the government’s solar power purchase project would be announced within 2015. 

- Good for solar power companies 

This issue has positive sentiment on both solar power generators and EPC contractors: GUNKUL, DEMCO, SUPER, SOLAR, TSE, SPCG, EA, IFEC, PSTC, PPP, and UAC. Given that these companies are granted the selling rights for 50 MW solar power, not only GUNKUL and DEMCO with potential earnings growth and financial position are likely to win the selling rights, but many other interesting companies are also likely to be accepted: SUPER, SOLAR, and TSE. If they are granted the selling right as projected, their earnings would grow significantly. Also, with low D/E ratio, they would be able to increase their capital. 

- DEMCO, GUNKUL are top picks. SUPER, SOLAR, TSE are dark horses 

We select DEMCO(FV@B18) and GUNKUL([email protected]) as top picks of the alternative energy sector, while SUPER, SOLAR, and TSE can also be dark horses in the project. Although share prices of many companies have risen in advance, many other companies whose share prices are still undervalued can be speculated as well.