The uninspiring outlook through 4Q22 and potential consensus earnings downgrades may cap the share price performance going forward. Nevertheless, the current valuation has already priced this in, further downside should be limited. Downgraded to HOLD.
3Q22 core earnings to weaken, led south by Chemical biz
We project SCC to post a 3Q22 net profit of Bt1,974m (down by 71% YoY and 80% QoQ) and core earnings of Bt3,554m (down by 59% YoY and 65% QoQ), squeezed mainly by weaker Chemical biz earnings. The Chemical unit looks set to report weaker numbers both YoY and QoQ for 3Q22, due to smaller YoY sales volume (flat QoQ) [slower demand across the board] and lower spreads for all products (YoY and QoQ). From the margin perspective, chemical spreads fell YoY, squeezed by lower product prices amid an increase in Naphtha feedstock cost.