TPCH, a new model portfolio selection.

TPCH, a new model portfolio selection.

TPCH (14.60) is the largest beneficiary of next growth phase in green power as the only listed pure-play biomass power plant operator, TPCH could see the strongest earnings growth among its peers; thanks to both existing capacity coming on stream this year, as well as those in the pipeline, and potentially winning bids for additional biomass capacity.  Including potential expansion plans into Cambodia.  This stock just recently sold off from the high to mid teens on what looks to me for no good reason, other then SET market malaise.

According to Thailand’s latest PDP 2015,  the regulators plans to boost renewable capacity portion from the current 8% of a total 35GW generating capacity to 20% of the total capacity of 57.5GW by 2036. 

This company will triple its capacity within 18 months and so view positively that TPCH’s earnings growth momentum will start to accelerate in 2016 driven by the three completed biomass power plants -plus the three more power plants currently under construction.  Together, they will help TPCH triple its capacity from the current 20MW to 60MW by 2017.  Impressive.

Pattanee project looks set to unlock value. The next growth driver after TPCH’s six secured power plants will be the company’s largest and potentially most profitable biomass power plant project in called Pattanee, in southern Thailand.  A letter of intention for the first phase of 21MW (of a total 42MW) has been received from Electricity Generation Authority of Thailand (EGAT) and a PPA is currently being drafted.  The second phase of 21MW could also be of interest to EGAT given the low level of competition and first mover advantage.  Trigger points for share price upside include:
 
1) announcement of the PPA for PTG’s first phase of 21MW by 2Q16;
2) announcement of securing the second phase 21MW agreement with EGAT; and
3) progress and completion of the three remaining projects (MGP, PGP, and SGP), all expected to be completed by end-16.
 
I see TPCH's profits tripling from 0.25 Baht per share last year to 0.75 per share this year, and to further rise to 1.20 per share in 2017.  Looks like a superb growth stocks all the while being the leader in a desirable upcoming and less cyclical industry. 

Today I am so adding TPCH at the current price of 14.60 to my current model portfolio.