GPSC signs appointment of underwriters for its IPO
Global Power Synergy Public Company Limited (GPSC) has finalised the price of its IPO at 27 baht/share. The shares will be available for reservation from May 8 to 10, 2015, before it enters the Stock Exchange of Thailand (SET) on May 18. It has appointed KTZMICO, Finansa, and Tisco as its lead underwriters. The company is confident that the shares will be well-received by the investors thanks to its solid foundation as the leading producer and distributor of electricity, steam, and public utility, and the experience of its executives. Also, its major shareholders are companies like PTT and Thai Oil. Mr. Noppadol Pinsupa, President of Global Power Synergy Public Company Limited, said that the funds will be used in its business expansion both locally internationally, and as working capital.
Mr. Varah Sucharitakul, Executive Director of Finansa Securities Ltd., as the representative of the underwriter of the IPO of GPSC, said that the shares will be available for the public for the first time, offering 374.57 million IPO shares with par value of 10 baht. The price is 27 baht per share, which is a reasonable price considering its fundamental factors. The shares will be available for reservation from May 8 to 12, 2015, and is expected to be registered at the Stock Exchange of Thailand (SET) on May 18, with the abbreviated name GPSC. Meanwhile, its co-underwriters also include Bualuang Securities, Kasikorn Securities, Maybank Kim Eng Securities Thailand, Finansia Syrus Securities, KGI Securities and RHB OSK Securities.
“GPSC’s core business is to generate and supply electricity, steam, and public utility. As of December 31, 2014, the total generating capacity is 1,315 MW of electricity, 1,345 tons per hour of steam, 12,000 refrigeration tons of water, and 2,080 cubic meters per hour of processed water. Our capacity based on shareholding ratio at other power plants is 536 MW of electricity and 167 tons per hour of steam. Our total capacity is 1,851 MW of electricity, 1,512 tons per hour of steam, 12,000 refrigeration tons of water, and 2,080 cubic meters per hour of processed water. Our core customers are (1) Public organizations such as EGAT, PEA, and MEA, a group which generate steady and predictable income thanks to clearly stipulated amount and price of purchase, and (2) Industrial clients.
In addition to the growth in terms of generation capacity, GPSC’s profitability is also outstanding. In 2013, the total revenue of GPSC was 26,517 million baht, a 6.34% increase from 24,937 million baht in the previous year, thanks to the increase in the sale of its electricity. The company’s initial profit was 1,985 million baht, a 1.64% increase from 1,953 million baht in 2012. However, despite the increase in initial profit and the decrease in capital thanks to the loan payment, the company experienced some setback from the currency exchange rate and legal disputes with EGAT caused by misinterpretation of contract. A verdict was reached by the arbitration committee. Additionally, there was an increase in tax burden. As a result, in 2014, the company’s net profit was 1,166 million baht, a 6.03% decrease from 1,241 million baht in 2012.
In 2014, the company’s total revenue was 23,891 million baht, a 9.92% decrease from 26,517 million baht in 2013, because of the decrease of income in the IPP electricity contract. EGAT ordered Sriracha Power Plant to distribute less electricity than stated in the contract, and to stop the production momentarily. However, order also meant reduced cost in natural gas, which is based on production and per-hour maintenance. Therefore, it did not negatively affect the company’s profitability. The CUP in Rayong also saw an increase in steam sale, so the initial profit for 2014 was 2,083 million baht, a 4.96% increase compared to 1,985 million baht in 2013. Additionally, profits from investment and joint-ventures with other companies were also paid, and the loan payment burden was lessened, so the net profit of the company in 2014 was 1,581 million baht, a 35.58% increase from 1,166 million baht in 2013.
Mr. Noppadol continued that the company aims to become one of the global electricity leaders through expansion of its investment and projects locally and internationally. Its short-term goal is to increase its power production capacity, adding 600 – 1,000 MW within 2019. The focus is on procuring other power plants and developing cogeneration power plants, combined cycle power plants, and renewable energy power plants. It has adopted Circular Economy approach which focuses on reusing and recycling, such as making use of the heat from the steam in the power plant. This approach will help the company achieve its target. The company has established four key policies for its growth. 1) Growth along with PTT Group, in order to build consistency in power and public utility for the production process of the companies under the PTT Group. 2) Quick win, meaning to grow faster through short-term projects or acquisitions, in order for the company to quickly increase its electricity generation capacity. The company has plans to develop power plants and invest in BIC to build its second cogeneration power plant
project, and invest in renewable energy plants such as solar energy, wind power, biogas, and biomass, which take a short time to construct. Additionally, the company has merger and acquisition plants for power plants in Thailand and overseas, both ones that are in business and ones under construction. 3) Big win, or grow by investing in large power plants in Thailand and neighboring countries, so that the company can increase its electricity production capacity in the long run. The company has plans to develop and invest in power plants in Thailand and neighboring countries such as Myanmar, Laos, Cambodia, and Indonesia. 4) Adjacent and Support Opportunities, or to invest in relevant businesses, in addition to electricity business. GPSC has plans to expand its business in other relevant fields such as energy storage system and battery.
“We are confident that GPSC will continue to grow further thanks to the added working capital, which will strengthen our financial status, our fame, and our reliability as a SET registered company,” said Mr. Noppadol.