Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

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Thai Equity - Bottom-up - Equities

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Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

<ul>
<li>Retain the HOLD rating with a target price of Bt43.0. Given the macro challenges ahead viz, economic recession, prolonged China lockdown, and new olefins capacity addition in Asia</li>
<li>Disappointing 3Q22 results PTTGC reported a net loss of Bt13.4bn in 3Q22(compared to a profit of Bt7.0bn in 3Q21 and Bt1.4bn in 2Q22).The result came out lower than our expectation.</li>
<li>Stripping off the extra items (stock loss of Bt8.1bn, hedging Bt2.1bn etc.) the operating profit also dropped to Bt813m (-90%YoY, -94%QoQ) mainly dragged by frail refinery and petrochemical segment contribution.</li>
</ul>


Retain the HOLD rating with a target price of Bt43.0. Given the macro challenges ahead viz, economic recession, prolonged China lockdown, and new olefins capacity addition in Asia
Disappointing 3Q22 results PTTGC reported a net loss of Bt13.4bn in 3Q22(compared to a profit of Bt7.0bn in 3Q21 and Bt1.4bn in 2Q22).The result came out lower than our expectation.
Stripping off the extra items (stock loss of Bt8.1bn, hedging Bt2.1bn etc.) the operating profit also dropped to Bt813m (-90%YoY, -94%QoQ) mainly dragged by frail refinery and petrochemical segment contribution.


PTTGC : Margin Pressure and Huge Stock Loss in 3Q22

<ul>
<li>We downgrade the recommendation to HOLD (from BUY) and revise down target price to Bt43.0 (19% down from previous Bt53.0), to reflect the earnings revision for 2022-23</li>
<li>3Q22 earnings to turn loss We estimate PTTGC to report a loss of Bt8.8bn in 3Q22, compared to a profit of Bt7.0bn in 3Q21 and Bt1.4bn in 2Q22. </li>
<li>Bleak 2023-2024 outlook The 2023-24 earnings should also remain in doldrums, as the softening crude oil price (projected to decline from US$100/bbl. in 2022 to US$85/bbl. in 2024)</li>
</ul>


We downgrade the recommendation to HOLD (from BUY) and revise down target price to Bt43.0 (19% down from previous Bt53.0), to reflect the earnings revision for 2022-23
3Q22 earnings to turn loss We estimate PTTGC to report a loss of Bt8.8bn in 3Q22, compared to a profit of Bt7.0bn in 3Q21 and Bt1.4bn in 2Q22. 
Bleak 2023-2024 outlook The 2023-24 earnings should also remain in doldrums, as the softening crude oil price (projected to decline from US$100/bbl. in 2022 to US$85/bbl. in 2024)


PTTGC : Weak Petrochemical Performance and One-Time Losses in 3Q22

<ul>
<li>We maintain the BUY call with a TP of Bt53.0.The 2Q22 net profit fall 95% YoY and 67 QoQ to Bt1.4bn(a 7-quarter low)mainly dragged by huge hedging and FX loss</li>
<li>Hedging &amp; FX loss hit 2Q22 profit The 2Q22 net profit fall to Bt1.4bn (-95% YoY, -67% QoQ), a 7-quarter low, mainly dragged by a huge hedging and FX loss. </li>
<li>Excluding the stock gain of Bt3.1bn, hedging loss of Bt12.7bn and FX gain of Bt4.4bn etc., the recurring profit stood at Bt13.7bn (+31% YoY, +120% QoQ), growing YoY and QoQ </li>
</ul>


We maintain the BUY call with a TP of Bt53.0.The 2Q22 net profit fall 95% YoY and 67 QoQ to Bt1.4bn(a 7-quarter low)mainly dragged by huge hedging and FX loss
Hedging &amp; FX loss hit 2Q22 profit The 2Q22 net profit fall to Bt1.4bn (-95% YoY, -67% QoQ), a 7-quarter low, mainly dragged by a huge hedging and FX loss. 
Excluding the stock gain of Bt3.1bn, hedging loss of Bt12.7bn and FX gain of Bt4.4bn etc., the recurring profit stood at Bt13.7bn (+31% YoY, +120% QoQ), growing YoY and QoQ 


PTTGC : 2Q22 Recurring Profit Grew from Strong Refinery Performance

<ul>
<li>We upgrade the rating to BUY from HOLD with an unrevised TP of Bt53.0 due to a decent upside from the current share price.The stock performance seems to have factored </li>
<li>Hedging loss to drag 2Q22 profit We expect the 2Q22 net profit slump to a new quarterly low of Bt1.5bn (-94%YoY, -64%QoQ). The YoY plunge will be from the absence </li>
<li>The strong refinery performance with GRM spiking to US$21/bbl (10x YoY,3x QoQ) led by high diesel spread, will be offset by weak olefins segment performance from the decline of plant </li>
</ul>


We upgrade the rating to BUY from HOLD with an unrevised TP of Bt53.0 due to a decent upside from the current share price.The stock performance seems to have factored 
Hedging loss to drag 2Q22 profit We expect the 2Q22 net profit slump to a new quarterly low of Bt1.5bn (-94%YoY, -64%QoQ). The YoY plunge will be from the absence 
The strong refinery performance with GRM spiking to US$21/bbl (10x YoY,3x QoQ) led by high diesel spread, will be offset by weak olefins segment performance from the decline of plant 


PTTGC : GRM Spike Overshadowed by Weak Petrochemical Performance

<ul>
<li>PTTGC reported 1Q22 net profit of Bt4.2bn(-57% YoY, +30% QoQ). The result came out lower than our expectation and 24% below consensus.</li>
<li>Excluding the stock gain of Bt4.9bn, hedging loss of Bt8.6bn and FX gain of Bt595m etc.,  the recurring profit stood at Bt6.2bn (-29% YoY, +74% QoQ).</li>
<li>Dropped YoY mainly due to weak Olefins business performance (lower spreads, 26% YoY decline in EBITDA margin), while improved contribution from performance materials segment from Allnex acquisition in 4Q21 </li>
</ul>


PTTGC reported 1Q22 net profit of Bt4.2bn(-57% YoY, +30% QoQ). The result came out lower than our expectation and 24% below consensus.
Excluding the stock gain of Bt4.9bn, hedging loss of Bt8.6bn and FX gain of Bt595m etc.,  the recurring profit stood at Bt6.2bn (-29% YoY, +74% QoQ).
Dropped YoY mainly due to weak Olefins business performance (lower spreads, 26% YoY decline in EBITDA margin), while improved contribution from performance materials segment from Allnex acquisition in 4Q21 


PTTGC: Weak Petrochemical Spreads Dragged 1Q22 Profit

Thailand

PTT Global Chemical PCL is a fully integrated petrochemical and chemical company. The Company's products are derived from its main product, Olefins, namely ethylene and propylene.

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PTT Global Chemical (PTTGC TB)

PTTGC : Margin Pressure and Huge Stock Loss in 3Q22

Retain the HOLD rating with a target price of Bt43.0. Given the macro challenges ahead viz, economic recession, prolonged China lockdown, and new...

Pi Securities PCL, Thailand

PTTGC : Weak Petrochemical Performance and One-Time Losses in 3Q22

We downgrade the recommendation to HOLD (from BUY) and revise down target price to Bt43.0 (19% down from previous Bt53.0), to reflect the earnings...

Pi Securities PCL, Thailand

PTTGC : 2Q22 Recurring Profit Grew from Strong Refinery Performance

We maintain the BUY call with a TP of Bt53.0. The 2Q22 net profit fall 95% YoY and 67 QoQ to Bt1.4bn (a 7-quarter low) mainly dragged by huge...

Pi Securities PCL, Thailand

PTTGC : GRM Spike Overshadowed by Weak Petrochemical Performance

We upgrade the rating to BUY from HOLD with an unrevised TP of Bt53.0 due to a decent upside from the current share price.The stock performance...

Pi Securities PCL, Thailand

PTTGC: Weak Petrochemical Spreads Dragged 1Q22 Profit

PTTGC reported 1Q22 net profit of Bt4.2bn(-57% YoY, +30% QoQ). The result came out lower than our expectation and 24% below consensus.

Pi Securities PCL, Thailand

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