Prolonged strong core earnings growth into 3Q22 and throughout 2022 and a potential gush of consensus earnings upgrades should trigger PTTEP’s share price rally. The current valuation is still attractive—a YE22 PBV of 1.4x (0.7SD below its long-term mean of 2.0x) and a good 2022 dividend yield of 5.5% (against 2.8% for SET).
Another record high quarterly core earnings expected for 2Q22
We expect PTTEP to post a record high quarterly core earnings for the second consecutive quarter of Bt19,166m, up 72% YoY and 2% QoQ (stripping out assumed extra items—mainly loss on derivatives) and a net profit of Bt17,783m, up 149% YoY and 69% QoQ for 2Q22. The core profit growth drivers would be: 1) greater YoY and QoQ petroleum sales volume and 2) a higher YoY and QoQ mean petroleum sales price.