Earnings Report /

PTT Global Chemical PCL: Earnings beat our estimate; 2H20 to be even stronger

  • Above estimate

  • The bottom-line was 16% above our estimate

  • The key factors behind the YoY core operational weakness

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

Bualuang Securities
10 August 2020

A demand recovery following the easing of global lockdowns should boost chemical margins and profits through 3Q20. Delays to the start-ups of industry-wide new capacity would mean scope for upside to spreads and earnings. PTTGC currently trades at a YE21 PBV of only 0.8x (1.8SD below its long-term mean of 1.2x). Our BUY call stands.

Above estimate

PTTGC posted a 2Q20 net profit of Bt1,671m, down 24% YoY but a QoQ turnaround from the net loss reported for 1Q20. Stripping out extra items, core earnings would be Bt1,176m, down 45% YoY but a QoQ turnaround. The bottom-line was 16% above our estimate, due to lower extra losses than we had assumed (it was in line with the street).