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Energy Absolute Pledges Growth Amid Share Price Drop

Energy Absolute Plc (EA), a prominent player in renewable energy and electric vehicle (EV) development and operation, has committed to expanding its business despite a recent significant drop in its share price. Founder and CEO Somphote Ahunai reassured stakeholders on Monday, declaring that the company had already cleared its debt using proceeds from a forced share sale.

Somphote, reflecting on the turbulent period, stated, “I was injured, but remain alive.” The company had used its shares to secure a loan worth about 3% of its assets, a proportion deemed small and unlikely to cause issues. However, this decision sparked rumors, including speculation about Somphote’s sale of his shares, which ultimately shook investor confidence, leading to a sharp decline in EA’s share price.

“All problems are now clear, and I remain a major shareholder, holding more than 33% of the company’s shares,” Somphote assured. The previous week, EA signed a memorandum of understanding with China Railways Rolling Stock Corporation, marking a strategic partnership.

On Monday, EA’s shares on the Stock Exchange of Thailand (SET) saw a notable recovery, rising by 12.5% during the morning session after plummeting over 40% across five consecutive days the previous week.

Deputy CEO Amorn Sapthaweekul clarified in a filing to the SET that the company’s price fluctuations were influenced by external factors beyond their control. “There are no significant business developments on the horizon that would affect the company’s price,” he added.

The sharp decline in EA’s share price led some electric bus buyers to delay or cancel orders slated for delivery this year, particularly in the second quarter. Consequently, EA may have to revise its sales target of 5,000 units for the year.

“With the share price dropping significantly, some buyers are hesitant, questioning the company’s viability and preferring to wait until the situation stabilizes,” said Amorn. He noted, however, that the number of canceled orders was minimal and some customers only postponed their orders.

Yuanta Securities (Thailand) observed continuous declines in the share prices of companies within the EA group, attributing it to a bleak profit outlook for the second quarter compared to the first quarter. Concerns over annualized EV shipments and customer delays due to doubts about the brand’s credibility were highlighted by the brokerage.

Yuanta also noted pressure on share prices due to a reduction in the fuel tariff rate and the expiration of adder incentives for EA’s solar power plants. Additionally, there were investor concerns about potential debt rollovers due in the third quarter.

Yuanta advised investors to hold off on EA investments until positive developments emerge and the company’s cash flow improves.

Amorn acknowledged the recent plunge in EA shares was due to forced sales but assured that EA is prepared to support Nex Point’s capital increase. Nex Point, listed on the SET, operates a commercial EV business through its subsidiary Absolute Assembly Co., a joint venture with a 55% investment from EA and 45% from Nex Point.

“EA’s cash flow remains robust, enabling us to repay 50 billion baht in debts over the next decade, even after the adder tariffs at all power plants expire,” said Amorn.

In attendance at the announcement were key officials and executives from both EA and Nex Point, reinforcing the company’s commitment to stability and growth amidst market challenges.

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