Earnings Report /

Star Petroleum Refining PCL: 2Q22 earnings in line; good yield comeback!

  • In line with estimates

  • SPRC reported a 2Q22 net profit of Bt7,156m

  • SPRC announced 1H22 DPS of Bt0.96

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Bualuang Securities
15 August 2022

Expectations of enhanced YoY core earnings growth in 3Q22, the substantial core operational improvement this year, underpinned by GRM expansion, and a good dividend yield should support the share price going forward. SPRC’s current valuation is still undemanding—a YE22 PBV of 1.2x (0.7SD below its long-term average) and 2022 dividend yield of 20.4% (against 3.0% for the SET) which should provide a buffer against the risk of price slippage. As the gasoline peak season is winding down (SPRC is the best fit for this theme), we don’t see the near-term catalyst for the share price, hence we have downgraded our rating from TRADING BUY to HOLD.

In line with estimates

SPRC reported a 2Q22 net profit of Bt7,156m, up 9-fold YoY and 35% QoQ. Stripping out a Bt1,967m inventory gain, a Bt302m FX loss, and a Bt337m loss on derivatives, the core profit would be Bt6,161m, a YoY turnaround and up 184% QoQ. The result was in line with our estimate and that of the consensus. SPRC announced 1H22 DPS of Bt0.96, implying a simple yield of 8.5% (XD: 24 Aug, payment: 8 Sep).