Ratch Group Public Co. Ltd.

Overview Key strengths Key risks Strong power purchase agreements (PPAs) support cash flow stability. Elevated leverage from acquisition appetite, growth investments, and materially higher debt tolerance than before. Solid market position in Thailand's power sector. Increasing exposure to debt and earnings from equity affiliates could lead to off-balance-sheet debt and a higher reliance on dividend income. Shareholder support from the Electricity Generating Authority of Thailand (EGAT). Some earnings volatility from investments related to non-energy infrastructure. In our view, the company's heightened spending in the past three years indicates an increased risk appetite and a structural shift in its debt tolerance. The company still has healthy interest-servicing ability, despite its rising leverage. EBITDA interest coverage trending at 3.1x-3.5x indicates this. This

...Ratch Group Public Co. Ltd.'s leverage will remain elevated due to debt-funded growth spending. In our view, the company's heightened spending in the past three years indicates an increased risk appetite and a structural shift in its debt tolerance. The company still has healthy interest-servicing ability, despite its rising leverage. EBITDA interest coverage trending at 3.1x- 3.5x indicates this. This contrasts with similar highly leveraged peers with ratios of 1.0x-1.5x. We believe this will preserve Ratch's credit quality as it executes growth plans. Ratch will continue to expand its overseas renewables portfolio through Nexif Ratch Energy Investments Pte. (NREI), which it acquired in 2022. We project capital expenditure (capex) of Thai baht (THB) 3.0 billion-THB5.0 billion annually for under-construction and development...

Full Report