Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

A full service Thai brokerage

Krungthai XSpring

Krungthai XSpring is a full service broker. The company provides a wide range of investment services such as Securities Brokerage, Derivative Agent Business, Securities Borrowing and Lending, Securities Trading, Underwriting, Financial Advisory, Wealth Advisory, Private Fund Management and International Markets Securities Trading. 

In terms of credibility, Fitch Ratings has assigned Krunghtai XSpring a long-term rating of AA- and a national short-term rating of F1+ with stable outlook.

Equity Bottom-Up

<ul><li>PTTEP is a cyclical play whose share price has a strong correlation with crude oil prices at 80%.</li><li>The tensions in the Middle East could pose significant risks to oil supply and the share price should the situation escalate into a regional war.</li><li>Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024- 26E, with limited upside in regard to the tactical risk.</li></ul>

PTTEP is a cyclical play whose share price has a strong correlation with crude oil prices at 80%.The tensions in the Middle East could pose significant risks to oil supply and the share price should the situation escalate into a regional war.Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024- 26E, with limited upside in regard to the tactical risk.

Ptt Exploration and Production -In-Line NP in 1Q24 and Stronger Momentum in 2Q24E

<ul><li>PTTEP is a cyclical play whose share price has a strong correlation with crude oil prices at 80%.</li><li>Hence, the YTD increase in crude oil prices, attributed to concerns regarding tight supply amid escalating tensions in the Middle East — particularly in the event of a direct confrontation between Israel and Iran — could act as a short-term catalyst for the share price.</li><li>Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024-26E, with limited upside in regard to the tactical risk. </li></ul>

PTTEP is a cyclical play whose share price has a strong correlation with crude oil prices at 80%.Hence, the YTD increase in crude oil prices, attributed to concerns regarding tight supply amid escalating tensions in the Middle East — particularly in the event of a direct confrontation between Israel and Iran — could act as a short-term catalyst for the share price.Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024-26E, with limited upside in regard to the tactical risk. 

Ptt Exploration and Production -Expect Flat 1Q24E NP QoQ and Stronger Momentum in 2Q24E

Thematic (Sector/Industry)

<ul>
<li>We expect the energy sector to deliver a mixed performance in 3Q24E.</li>
<li>We maintain a Neutral investment rating on the sector, reflecting weak industry indicators in 2H24E (e.g., oil prices, refining margins, marketing margins).</li>
<li>In addition, we downgrade our recommendation for refinery stocks (BCP and TOP) to Outperform (from Buy) due to tactical factors, as their share prices have risen in line with improving refining margins. </li>
</ul>


We expect the energy sector to deliver a mixed performance in 3Q24E.
We maintain a Neutral investment rating on the sector, reflecting weak industry indicators in 2H24E (e.g., oil prices, refining margins, marketing margins).
In addition, we downgrade our recommendation for refinery stocks (BCP and TOP) to Outperform (from Buy) due to tactical factors, as their share prices have risen in line with improving refining margins. 


Industry Update - Energy (Upstream-Downstream)

<ul><li>The prolonged interest rate upcycle and USD appreciation pose downside risks to global oil demand and crude oil prices.</li><li>Moreover, the initiation of new refining capacity is pressuring energy stock prices, especially those in the refinery sector.</li><li>Refinery stock prices have already reflected weaker refining margins and operating performance trends anticipated for 2Q24E. </li></ul>

The prolonged interest rate upcycle and USD appreciation pose downside risks to global oil demand and crude oil prices.Moreover, the initiation of new refining capacity is pressuring energy stock prices, especially those in the refinery sector.Refinery stock prices have already reflected weaker refining margins and operating performance trends anticipated for 2Q24E. 

Energy (Upstream-Downstream) - Weak 2Q24E Earnings for Refineries

<ul><li>The tensions between Hamas and Israel in Gaza have intensified due to Iran's involvement, raising global concerns that the situation could escalate into a regional war.</li><li>Israel's insistence on retaliating against Iran has heightened these tensions, which could lead to disruptions in oil supply, potentially persisting until 2H24E.</li><li>This could pose upside risk to oil prices, albeit limited, given the fragility of global economic growth and oil demand. </li></ul>

The tensions between Hamas and Israel in Gaza have intensified due to Iran's involvement, raising global concerns that the situation could escalate into a regional war.Israel's insistence on retaliating against Iran has heightened these tensions, which could lead to disruptions in oil supply, potentially persisting until 2H24E.This could pose upside risk to oil prices, albeit limited, given the fragility of global economic growth and oil demand. 

Energy (Oil) - Tensions in the Middle East May Intensify - APRIL 17, 2024

Thailand

PTT Exploration and Production Public Company Limited explores for crude oil and natural gas, develops fields for production, and produces oil and natural gas. The Company is a subsidiary of the Petroleum Authority of Thailand.

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PTT E&P (PTTEP TB)

Ptt Exploration and Production -In-Line NP in 1Q24 and Stronger Momentum in 2Q24E

The tensions in the Middle East could pose significant risks to oil supply and the share price should the situation escalate into a regional war.

Krungthai XSpring

Ptt Exploration and Production -Expect Flat 1Q24E NP QoQ and Stronger Momentum in 2Q24E

Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024-26E, with limited upside...

Krungthai XSpring

Industry Update - Energy (Upstream-Downstream)

We maintain a Neutral investment rating on the sector, reflecting weak industry indicators in 2H24E (e.g., oil prices, refining margins, marketing...

Krungthai XSpring

Energy (Upstream-Downstream) - Weak 2Q24E Earnings for Refineries

Refinery stock prices have already reflected weaker refining margins and operating performance trends anticipated for 2Q24E.

Krungthai XSpring

Energy (Oil) - Tensions in the Middle East May Intensify - APRIL 17, 2024

The tensions between Hamas and Israel in Gaza have intensified due to Iran's involvement, raising global concerns that the situation could escalate...

Krungthai XSpring

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