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

PTT Oil & Retail Business  / Equity Bottom-Up

<ul><li>The 4Q24 and 2024 earnings came out in line with expectations.</li><li>We maintain our 2025-26E earnings forecasts and expect the firm to close the earnings gap by 2026E, with 2Y core EPS growing at a 13% CAGR (in line with the sector), driven by recovering oil sales volume and an improving EBITDA margin in the lifestyle business following the divestment of unprofitable operations.</li><li>The valuation metrics suggest maintaining a positive view on the current valuation, as the market price implies around 25% upside from the unchanged 12M FV of Bt14.24 and the 2Y core EPS growth is in line with the sector’s average.</li></ul>

The 4Q24 and 2024 earnings came out in line with expectations.We maintain our 2025-26E earnings forecasts and expect the firm to close the earnings gap by 2026E, with 2Y core EPS growing at a 13% CAGR (in line with the sector), driven by recovering oil sales volume and an improving EBITDA margin in the lifestyle business following the divestment of unprofitable operations.The valuation metrics suggest maintaining a positive view on the current valuation, as the market price implies around 25% upside from the unchanged 12M FV of Bt14.24 and the 2Y core EPS growth is in line with the sector’s average.

Ptt Oil and Retail Business -In-Line 4Q24/2024 Earnings

<ul><li>4Q24E profit is expected to recover YoY and QoQ. We have revised down our 2025-26E net profit estimates by 17%, reflecting a more conservative GP/liter assumption.</li><li>However, 2- year core EPS is projected to grow at a 12% CAGR, in line with the sector’s average.</li><li>We maintain our Outperform rating due to limited tactical risks and a positive view on the current valuation, with the stock trading at a discount to the new FV of Bt14.04 (previously Bt16.6).</li></ul>

4Q24E profit is expected to recover YoY and QoQ. We have revised down our 2025-26E net profit estimates by 17%, reflecting a more conservative GP/liter assumption.However, 2- year core EPS is projected to grow at a 12% CAGR, in line with the sector’s average.We maintain our Outperform rating due to limited tactical risks and a positive view on the current valuation, with the stock trading at a discount to the new FV of Bt14.04 (previously Bt16.6).

Ptt Oil and Retail Business - 4Q24E Earnings Recovery

<ul><li>The 3Q24 earnings turned to a net loss, pressured by oil stock losses, forex losses, and seasonal factors.</li><li>We maintain our 2024-26E earnings forecasts, expecting a QoQ recovery in 4Q24E and strong core profit growth at a 28% CAGR in 2025- 26E, driven by a low base effect in 2024E and divestment of unprofitable businesses (Texas Chicken, Kouen).</li><li>The stock price has largely priced in the negative factors and implies upside gain of approximately 13% from the fair value (FV) of Bt17.0.</li></ul>

The 3Q24 earnings turned to a net loss, pressured by oil stock losses, forex losses, and seasonal factors.We maintain our 2024-26E earnings forecasts, expecting a QoQ recovery in 4Q24E and strong core profit growth at a 28% CAGR in 2025- 26E, driven by a low base effect in 2024E and divestment of unprofitable businesses (Texas Chicken, Kouen).The stock price has largely priced in the negative factors and implies upside gain of approximately 13% from the fair value (FV) of Bt17.0.

Ptt Oil and Retail Business - Larger-Than-Expected Net Loss Due to Seasonal and Specific Factors

<ul><li>The 2Q24 earnings weakened as expected, pressured mainly by the mobility business.</li><li>The 2H24E earnings are likely to continue to be pressured by the mobility business (with both challenging sales volume and GP/liter) .</li><li>Conversely, the lifestyle and global businesses will grow strongly in the period. </li></ul>

The 2Q24 earnings weakened as expected, pressured mainly by the mobility business.The 2H24E earnings are likely to continue to be pressured by the mobility business (with both challenging sales volume and GP/liter) .Conversely, the lifestyle and global businesses will grow strongly in the period. 

OR TB -Weak 2Q24 Earnings as Expected, Weighed Down by Mobility Business

<ul><li>The 2Q24E earnings are expected to have weakened, pressured mainly by the mobility business.</li><li>Meanwhile, the marketing margin should remain challenging in 2H24E, and the full-year marketing margin is likely to align with our projections.</li><li>In particular, the new Petroleum Act, which will be implemented this year, may pose risks to downstream operators (refineries and oil retailers) if oil prices are controlled, as opposed to the current liberalization. </li></ul>

The 2Q24E earnings are expected to have weakened, pressured mainly by the mobility business.Meanwhile, the marketing margin should remain challenging in 2H24E, and the full-year marketing margin is likely to align with our projections.In particular, the new Petroleum Act, which will be implemented this year, may pose risks to downstream operators (refineries and oil retailers) if oil prices are controlled, as opposed to the current liberalization. 

Ptt Oil and Retail Business - Weak 2Q24E Earnings, Weighed Down by Mobility Business

Thailand

PTT Oil and Retail Business Public Company Limited distributes petroleum products. The Company offers oil, gas, fuels, LPG, lubricants, and other related items. PTT Oil and Retail Business serves customers in Thailand.

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PTT Oil & Retail Business (OR TB)

Ptt Oil and Retail Business -In-Line 4Q24/2024 Earnings

We maintain our 2025-26E earnings forecasts and expect the firm to close the earnings gap by 2026E, with 2Y core EPS growing at a 13% CAGR (in line...

Krungthai XSpring

Ptt Oil and Retail Business - 4Q24E Earnings Recovery

4Q24E profit is expected to recover YoY and QoQ. We have revised down our 2025-26E net profit estimates by 17%, reflecting a more conservative GP...

Krungthai XSpring

Ptt Oil and Retail Business - Larger-Than-Expected Net Loss Due to Seasonal and Specific Factors

We maintain our 2024-26E earnings forecasts, expecting a QoQ recovery in 4Q24E and strong core profit growth at a 28% CAGR in 2025- 26E, driven by...

Krungthai XSpring

OR TB -Weak 2Q24 Earnings as Expected, Weighed Down by Mobility Business

The 2H24E earnings are likely to continue to be pressured by the mobility business (with both challenging sales volume and GP/liter) .

Krungthai XSpring

Ptt Oil and Retail Business - Weak 2Q24E Earnings, Weighed Down by Mobility Business

The current valuation is attractive on share price weakness, and the tactical downside risk is limited. Our Outperform rating is thus maintained,...

Krungthai XSpring

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