Equity Analysis /
Thailand

PTT PCL: Better near-term prospects with the inception of new growth platform

  • Good core earnings prospects for 4Q21…

  • … and for 2022 across most key businesses

  • EV value chain…a new growth platform

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Bualuang Securities
24 November 2021

The expansive earnings outlook for 4Q21 and 2022 should catalyze the share price going forward. Also, potential new investments would add to long-term earnings growth profile. The current valuation is undemanding—a YE22 PBV of 1.0x (1.2SD below its long-term mean of 1.6x) with an attractive dividend yield of 5.7% for 2022 (against 2.7% for the SET).

Good core earnings prospects for 4Q21…

PTT’s 4Q21 core earnings look set to expand YoY, with bigger profits across all key businesses. The core profit is also projected to rise QoQ, driven by better numbers at the gas, E&P, oil, and refining businesses. PTT’s gas biz looks set to improve YoY and QoQ (greater sales volume and a fatter margin). PTTEP’s core profit is expected to increase YoY and QoQ (greater sales volumes, higher ASPs, lower unit costs). We expect better YoY and QoQ numbers at refining subsidiaries, buoyed by bigger crude runs and fatter margins. The oil biz earnings are likely to improve YoY and QoQ, boosted by higher sales volume. Meanwhile, chemical subsidiaries will post YoY core profit growth, led by fatter spreads of some products (stable QoQ).