The 3Q22 street-beating result, prolonged strong YoY core earnings growth through 4Q22, and expectations of higher oil prices amid OPEC’s massive production cut should trigger PTTEP’s share price rally. The current valuation is attractive—a YE23 PBV of 1.4x (0.6SD below its long-term mean) with a good 2023 dividend yield of 5.1% (against 3.1% for the SET).
Above all estimates
PTTEP reported a 3Q22 net profit of Bt24,172m, up 153% YoY and 17% QoQ. Stripping out extra items, core earnings would be Bt23,173m, up 111% YoY and 4% QoQ. The result was 34% above our forecast (26% above that of the consensus), due to higher sales volume than modeled, and lower unit cost and tax expenses than expected.