As the 2022 core earnings outlook is uninspiring, we therefore see no obvious catalyst for the share price. Nevertheless, its cheap valuation—trades at a YE22 PBV of only 0.6x (1.8SD below its long-term mean of 1.1x) and 2022 dividend yield of 5.8% (against 2.7% for the SET)—should lend some support for the share price. Over the long-run, the acquisition of Allnex will be PTTGC’s first step to transforming its portfolio into greater specialty, enhancing its profitability and long-term earnings profile. Our HOLD rating stands.
In line with estimates
PTTGC posted a 1Q22 net profit of Bt4,512m, down 53% YoY but up 39% QoQ. Stripping out extra items (mainly gains on inventory and FX, loss on commodity hedging), core earnings would be Bt6,536m, down 25% YoY but up 117% QoQ. The result was in line with our estimate and that of the consensus.