GGC swings to profit, clears losses, and gains biofuel tailwinds
Q2 profit turnaround on B100 biodiesel GGC swung to a Q2 net profit of 351 million baht from a loss, as B100 biodiesel sales jumped 39% on higher volumes and prices after the government changed the biodiesel blending mandate. This shows the core business is recovering and earning money again.
The profit swing is the clearest fundamental driver of the stock's recent gains.
Cleared accumulated losses, shares up 56% GGC turned profitable and wiped out its accumulated losses through a par-value cut and financial restructuring. The stock surged 56% in a month as analysts called it a turnaround play. Clearing past losses lets the company consider paying dividends again in future.
This explains the sharp share-price move and the improved financial health investors are reacting to.
Government biofuel tax cuts could lift demand Thailand is considering cutting excise taxes on biofuels to lower pump prices and boost consumption. DBS Vickers named GGC among 11 stocks set to benefit as a direct biofuel producer. Lower taxes would mean more ethanol and biodiesel sold, helping GGC's volumes and revenue.
A potential policy change that directly increases demand for GGC's main products.
New feedstock deal and bio-hub support GGC signed an agreement with CP Axtra to study collecting 50,000 litres of used cooking oil a year for possible sustainable aviation fuel and biochemicals. Separately, the industry minister visited GGC's Nakhon Sawan bio-complex, signalling government backing for its bio-industry expansion.
These are early-stage but show GGC building future feedstock supply and government support for its bio-hub strategy.