BANPU Eyes Turnaround from US Gas Business

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BANPU resumed trading on its first day and is in the process of seeking approval for a bond issuance of 80 billion baht, along with a proposed interim dividend payment of 0.4 baht per share, with the XD date set for September 11, 2026. The company is poised to return to sustained profitability from 2026 to 2028, driven by its gas and power plant businesses in the United States. Profit margins are rising in line with selling prices, as the company benefits directly from a tightening supply cycle in the US gas market, supported by AI-driven demand and LNG exports. There are also additional opportunities from potential mergers and acquisitions of gas assets or future expansion of gas-fired power plant investments in the US. The US gas market is entering a 10-year recovery cycle, with domestic oversupply expected to decline over the long term as US LNG production and export capacity expands from 2026 to 2030, accumulating over 87 percent, equivalent to 12 percent of US gas supply. This will enable exports to the European Union and Asia, where demand is rising, tightening the domestic market further. Additionally, US gas demand is growing at 1.7 percent, above the global average, driven by electricity needs from data centers, which are expected to expand 2.7 times over the same period. This will provide another significant boost to BANPU's US gas business, keeping profit margins on an upward trend. The company has sufficient liquidity to support capacity expansion. As of the first quarter of 2026, it held approximately 67 billion baht in cash, with an interest-bearing debt to equity ratio of around 1.5 times and a net debt to equity ratio of 0.79 times. Based on existing bond covenants not exceeding 1.75 times, it is estimated that the company can borrow at least an additional 220 billion baht, enough to cover its five-year investment plan of 3 billion US dollars. This includes the Temple III gas-fired power plant project with a capacity of 1,200 megawatts, requiring an investment of approximately 1.2 to 1.8 billion US dollars, as well as opportunities to expand gas asset investments and battery energy storage system projects. The average pre-merger target price for BANPU of 6.4 baht per share would imply a target price for the new company of around 16.7 baht per share, with 60 percent buy, 30 percent hold, and 10 percent sell recommendations.

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Energy Transition & Power Demand▲ · 1 stocks
Banpu Public Company Limited
BANPU
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US gas demand rising from AI-driven data centers and LNG exports, tightening supply and boosting BANPU's gas business margins.

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