Prolonged strong core earnings growth into 3Q22 and throughout 2022 should trigger PTTEP’s share price rally. The current valuation is still attractive—a YE22 PBV of 1.4x (0.6SD below its long-term mean of 2.0x) and a good 2022 dividend yield of 5.3% (against 2.8% for SET). BUY!
PTTEP reported a 2Q22 net profit of Bt20,600m, up 189% YoY and 96% QoQ. Stripping out extra items, core earnings would be Bt22,224m, up 99% YoY and 18% QoQ. The result was 16% above our forecast, due to higher ASP than modeled and lower unit cost than expected (but it was in line with that of the consensus). PTTEP announced 1H22 DPS of Bt4.25, implying a simple yield of 2.6% (XD: 15 Aug, payment: 26 Aug).