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>3Q24 profit declined QoQ due to seasonal factors and a weaker marketing margin but showed strong YoY growth, driven by an increased oil sales volume base and robust growth in the gross profit of non-oil businesses.</li><li>We maintain our 2024-26E net profit forecasts, expecting steady profit growth over the next two years (at 10% CAGR).</li><li>The decline in the stock price already reflects the 3Q24 performance. </li></ul>

3Q24 profit declined QoQ due to seasonal factors and a weaker marketing margin but showed strong YoY growth, driven by an increased oil sales volume base and robust growth in the gross profit of non-oil businesses.We maintain our 2024-26E net profit forecasts, expecting steady profit growth over the next two years (at 10% CAGR).The decline in the stock price already reflects the 3Q24 performance. 

Ptg Energy - 3Q24 Earnings Fell QoQ (Seasonal Factors, Weak Marketing Margin)

<ul><li>We expect the 3Q24E profit to have declined QoQ due to seasonal factors and a weaker marketing margin but show strong YoY growth thanks to a higher oil sales volume base and a robust non-oil gross profit contribution.</li><li>We maintain our <span style="font-size: var(--content-font-size);">2024-26E profit forecasts, anticipating steady growth over the </span>next two years (at approximately a 10% CAGR).</li><li>We have revised our fair value to Bt10.88 (from Bt9.90 previously), based on a required return of 7.0% (7.5% previously), reflecting adjustments to the market risk premium (MRP) and the Thai 10Y bond yield in our house view.</li></ul>

We expect the 3Q24E profit to have declined QoQ due to seasonal factors and a weaker marketing margin but show strong YoY growth thanks to a higher oil sales volume base and a robust non-oil gross profit contribution.We maintain our 2024-26E profit forecasts, anticipating steady growth over the next two years (at approximately a 10% CAGR).We have revised our fair value to Bt10.88 (from Bt9.90 previously), based on a required return of 7.0% (7.5% previously), reflecting adjustments to the market risk premium (MRP) and the Thai 10Y bond yield in our house view.

PTG ENERGY - Expect 3Q24E Earnings to Have Declined QoQ...

<ul><li>A strong base in oil sales volume and non-oil gross profit helped improve earnings quality and reduce sensitivity to uncontrollable changes in marketing margins in 1H24.</li><li>We have revised up our 2024-26E net profit forecasts by 13-20%, reflecting faster-than- expected growth in oil sales volume and the expansion of Punthai Coffee, which offsets weaker-than-expected LPG sales volume.</li><li>We raise our 12M FV to Bt9.86 (up from Bt9.12), based on a required return of 7.5%, but maintain an Outperform rating</li></ul>

A strong base in oil sales volume and non-oil gross profit helped improve earnings quality and reduce sensitivity to uncontrollable changes in marketing margins in 1H24.We have revised up our 2024-26E net profit forecasts by 13-20%, reflecting faster-than- expected growth in oil sales volume and the expansion of Punthai Coffee, which offsets weaker-than-expected LPG sales volume.We raise our 12M FV to Bt9.86 (up from Bt9.12), based on a required return of 7.5%, but maintain an Outperform rating

Ptg Energy - Solid Growth of Oil Sales Volume and Non-Oil Business

<ul><li>Despite the upbeat 2Q24 earnings, the share price is under pressure owing to the challenging marketing margin outlook in 2H24E and potential risks from the new Petroleum Act (if oil prices are controlled).</li><li>However, we believe the robust growth in oil sales volume and the non-oil businesses, particularly Punthai Coffee, supported by repeat usage from PT Max Card holders (approximately 21mn), could pose upside risks to our 2024-26E net profit forecasts.</li><li>We maintain our Outperform rating (12M FV of Bt9.12). </li></ul>

Despite the upbeat 2Q24 earnings, the share price is under pressure owing to the challenging marketing margin outlook in 2H24E and potential risks from the new Petroleum Act (if oil prices are controlled).However, we believe the robust growth in oil sales volume and the non-oil businesses, particularly Punthai Coffee, supported by repeat usage from PT Max Card holders (approximately 21mn), could pose upside risks to our 2024-26E net profit forecasts.We maintain our Outperform rating (12M FV of Bt9.12). 

Ptg Energy - Upbeat 2Q24 Earnings; Marketing Margin Remains a Challenge

<ul><li>The stock price has not factored in the strong 2Q24E earnings momentum as the marketing margin remains a challenging factor in 2H24E (amid the management of the Oil Fuel Fund Office and the likelihood of oil price hikes during the winter).</li><li>However, we view that the robust growth of oil sales volume and the non-oil businesses, supported by repeat service usage by PT Max Card cardholders across all systems (with approximately 21mn), will enable the company to withstand the challenging year in 2024E.</li><li>Hence, we have maintained our 2024-26E earnings forecasts (2Y EPS growth expected at a 10% CAGR).</li></ul>

The stock price has not factored in the strong 2Q24E earnings momentum as the marketing margin remains a challenging factor in 2H24E (amid the management of the Oil Fuel Fund Office and the likelihood of oil price hikes during the winter).However, we view that the robust growth of oil sales volume and the non-oil businesses, supported by repeat service usage by PT Max Card cardholders across all systems (with approximately 21mn), will enable the company to withstand the challenging year in 2024E.Hence, we have maintained our 2024-26E earnings forecasts (2Y EPS growth expected at a 10% CAGR).

Ptg Energy - Strong 2Q24E Earnings; Marketing Margin Remains a Challenge

Thailand

PTG Energy Public Company Limited consists of eight groups of businesses as follows: 1) Oil (the Company's core and original business) and Retail Business, 2) LPG Business, 3) Renewable Energy and Investment Business, 4) Logistics Business, 5) System and Equipment Management Business , 6) Food and Beverage Business 7) Auto Care and Maintenance Business, and 8) Electronic Money Business (e-Money). In this regard, the Company is determined to operate the business with the aim of satisfying consumers' needs in a comprehensive manner.

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PTG Energy PCL (PTG TB)

Ptg Energy - 3Q24 Earnings Fell QoQ (Seasonal Factors, Weak Marketing Margin)

We maintain our 2024-26E net profit forecasts, expecting steady profit growth over the next two years (at 10% CAGR). The decline in the stock price...

Krungthai XSpring

PTG ENERGY - Expect 3Q24E Earnings to Have Declined QoQ...

We maintain our 2024-26E profit forecasts, anticipating steady growth over the next two years (at approximately a 10% CAGR).

Krungthai XSpring

Ptg Energy - Solid Growth of Oil Sales Volume and Non-Oil Business

A strong base in oil sales volume and non-oil gross profit helped improve earnings quality and reduce sensitivity to uncontrollable changes in...

Krungthai XSpring

Ptg Energy - Upbeat 2Q24 Earnings; Marketing Margin Remains a Challenge

Despite the upbeat 2Q24 earnings, the share price is under pressure owing to the challenging marketing margin outlook in 2H24E and potential risks...

Krungthai XSpring

Ptg Energy - Strong 2Q24E Earnings; Marketing Margin Remains a Challenge

The stock price has not factored in the strong 2Q24E earnings momentum as the marketing margin remains a challenging factor in 2H24E

Krungthai XSpring

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