Earnings Report /
Thailand

PTT Global Chemical PCL: Deeper 3Q22 net loss than expected; 4Q22 core number to soften

  • Below estimates

  • PTTGC posted a 3Q22 net loss of Bt13,384m

  • PTTGC’s 4Q22 core profit is projected to decline YoY and QoQ

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Follow
Bualuang Securities
10 November 2022

The disappointing 3Q22 result may generate negative sentiment toward the share price in the short-term. Also, the 2022 core earnings outlook is uninspiring, hence we see no obvious catalyst for the share price. Nevertheless, its cheap valuation—trades at a YE23 PBV of only 0.6x (2SD below its long-term mean of 1.1x)—should limit the downside risk of the share price. Over the long-run, the acquisition of Allnex will be PTTGC’s first step to transforming its portfolio into expanded specialty niches, enhancing its profitability and long-term earnings profile. Our HOLD rating stands.

Below estimates

PTTGC posted a 3Q22 net loss of Bt13,384m, a reversal from net profits in 3Q21 and 2Q22. Stripping out extra items (mainly losses on inventories, FX and commodity hedging), core earnings would be Bt2,807m, down 73% YoY and 82% QoQ. The net loss was much deeper than our estimate (and that of the consensus), due to bigger extra losses than expected.