Equity Analysis /
Thailand

Thai (Bualuang):Energy-Improving market dynamics support QoQ profit expansion

  • 4Q20 aggregate core earnings to rise QoQ

  • Better market dynamics to support QoQ core profit growth in 1Q21

  • Potential street profit forecast upgrades amid improving outlook

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

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Bualuang Securities
21 January 2021

The core operations of our Energy coverage look set to improve QoQ through 1Q21, driven by a broad demand recovery and supported by seasonality. Furthermore, the 2021 market outlook and prospects for earnings are on the up. Despite recent share price rallies, the current metrics of Energy stocks are still bargains. Among our coverage, we now prefer PTTEP and TOP.

4Q20 aggregate core earnings to rise QoQ   

The Energy names under coverage—BANPU, PTT, PTTEP, BCP, IRPC, SPRC, and TOP—look set to post an aggregate 4Q20 NPAT of Bt35.4bn, up by 33% YoY and 56% QoQ, and core earnings of Bt16.7bn, down 14% YoY but up 31% QoQ. Most of the firms will mark YoY operational slumps, due to COVID-19 effects. The expected QoQ profit growth is driven by BANPU and refining firms. But we assume big extra gains, so anticipate both YoY and QoQ jumps in aggregate NPAT.