(Bloomberg) -- Energy Absolute Pcl Chief Executive Officer Somphote Ahunai’s aggressive expansion into electric vehicles and batteries has triggered concern about the renewable energy company’s debt burdens. That’s turned his stock into Southeast Asia’s worst performer.

Somphote, who owns about 40% of the Bangkok-based company, saw the value of his stake slump to about 67 billion baht ($1.8 billion) after the shares tumbled to their lowest level in almost three years on Thursday, according to data compiled by Bloomberg. The stock is down about 54% in 2023, capping the biggest drop among the 131 companies in the MSCI Southeast Asia Index.

Energy Absolute, Thailand’s largest renewable company by market value, has spent billions to build new production facilities for batteries as well as electric buses, ferries and trains as the government joins a global push for emission cuts. Still, the investments and electric vehicle expansion have ballooned debt and sales of products on credit.

“There is some growing concern about Energy Absolute’s financial health,” said Duladeth Bik, an analyst at DBS Vickers Securities (Thailand) Pcl. “Persistent negative operating cash flows would add further pressure on the company’s leverage with more borrowings.” 

Energy Absolute recorded a free cash flow shortfall of 6.4 billion baht in the first half of 2023 even as net income jumped 82% to 4.48 billion baht, according to data compiled by Bloomberg. 

The cash deficit was mainly due to increased investments and total account receivables, which more than doubled from a year earlier, according to Duladeth. Energy Absolute has relied most of electric vehicle sales on its units, which may create some risk exposure, he said, rating the stock as “fully valued.”

The company plans to boost capital investments by 60% to 11 billion baht this year, according to its latest presentation to investors. Somphote did not immediately reply to a request for comment.

Energy Absolute’s outstanding debt and most leverage ratios are still at manageable levels, Executive Vice President Vasu Klomkliang told investors last month. The company also hastened efforts to expand battery production to meet rising EV demand, according to Vasu. 

The growing appetite for EVs and battery products will support Energy Absolute’s earnings outlook, said Amnart Ngosawang, an analyst at Daol Securities (Thailand) Pcl.

Analysts are also upbeat on the company’s share price, with the 12-month average target price sitting about 60% above current levels. The stock gained 1.1% to close at 45 baht on Friday. 

(Adds closing share price in final paragraph.)

©2023 Bloomberg L.P.