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

PTT Oil & Retail Business  / Equity Bottom-Up

<ul>
<li>We remain positive on OR’s non-oil segment (mainly café amazon) growth outlook in 2022 and ahead after the site visit at Café amazon concept store and Amazon inspiring campus</li>
<li>Oil &amp; retail business model a wise strategy The non-oil businesses have proven to be successful and contributed to 21% to total EBITDA with more than 25%EBITDA margin in 2022</li>
<li>We expect the EBITDA contribution from non-oil business segment continue to grow from café-Amazon store expansion and higher profitability.The non-oil revenue is projected to grow at 8.5% CAGR during 2022-25E</li>
</ul>


We remain positive on OR’s non-oil segment (mainly café amazon) growth outlook in 2022 and ahead after the site visit at Café amazon concept store and Amazon inspiring campus
Oil &amp; retail business model a wise strategy The non-oil businesses have proven to be successful and contributed to 21% to total EBITDA with more than 25%EBITDA margin in 2022
We expect the EBITDA contribution from non-oil business segment continue to grow from café-Amazon store expansion and higher profitability.The non-oil revenue is projected to grow at 8.5% CAGR during 2022-25E


OR : Enhanced Profitability from Non-Oil Business

<ul>
<li>We upgrade the recommendation to BUY from HOLD based on a revised up target price of Bt30.0(11%up from previous Bt27.0)on the back of 10 to 36% earnings revision for 2022-23E</li>
<li>Higher marketing margin drove 2Q22 profit The 2Q22 net profit grew to an all-time high of Bt6.6bn (+104% YoY, +71% QoQ). The result came out better than our expectation </li>
<li>Oil business EBITDA rose to Bt8.3bn (+98%YoY,+73%QoQ), on the back of spike in gross profit/unit to Bt1.6/Liter (+31%YoY, +41%QoQ) from easing of diesel price cap and higher jet fuel sales.</li>
</ul>


We upgrade the recommendation to BUY from HOLD based on a revised up target price of Bt30.0(11%up from previous Bt27.0)on the back of 10 to 36% earnings revision for 2022-23E
Higher marketing margin drove 2Q22 profit The 2Q22 net profit grew to an all-time high of Bt6.6bn (+104% YoY, +71% QoQ). The result came out better than our expectation 
Oil business EBITDA rose to Bt8.3bn (+98%YoY,+73%QoQ), on the back of spike in gross profit/unit to Bt1.6/Liter (+31%YoY, +41%QoQ) from easing of diesel price cap and higher jet fuel sales.


OR : Revamping Oil Marketing Margin and Undemanding Valuation

<ul>
<li>Yesterday analyst meeting came out in a positive tone. We maintain the HOLD rating with a target price of Bt27.0, derived from an SOTP methodology. Our TP implies 25xPE’22E</li>
<li>Expect the 2Q22 earnings to improve both YoY and QoQ, on the back of continued oil sales growth  and healthy marketing margin.</li>
<li>The 2H22 earnings should improve YoY from better sales growth, however oil marketing margin may prone to downside risk as the crude oil price continue to remain at high levels.</li>
</ul>


Yesterday analyst meeting came out in a positive tone. We maintain the HOLD rating with a target price of Bt27.0, derived from an SOTP methodology. Our TP implies 25xPE’22E
Expect the 2Q22 earnings to improve both YoY and QoQ, on the back of continued oil sales growth  and healthy marketing margin.
The 2H22 earnings should improve YoY from better sales growth, however oil marketing margin may prone to downside risk as the crude oil price continue to remain at high levels.


OR: Rising Sales and Healthy Margin in 2Q22

<ul>
<li>Yesterday analyst meeting came out in a neutral tone,we expect the dip in oil marketing margin (diesel price cap) to persist till 1H22, while revamping oil and F&amp;B sales volume </li>
<li>Expect the 1Q22 earnings to improve QoQ from improving oil and F&amp;B sales volume, while dip in oil marketing margin would drag the earning YoY.</li>
<li>Positive 2022 outlook with a 9% EPS growth. The post COVID-19 economic recovery is expected to drive the oil and F&amp;B sales volume 10 to 15%,which will offset the 9%</li>
</ul>


Yesterday analyst meeting came out in a neutral tone,we expect the dip in oil marketing margin (diesel price cap) to persist till 1H22, while revamping oil and F&amp;B sales volume 
Expect the 1Q22 earnings to improve QoQ from improving oil and F&amp;B sales volume, while dip in oil marketing margin would drag the earning YoY.
Positive 2022 outlook with a 9% EPS growth. The post COVID-19 economic recovery is expected to drive the oil and F&amp;B sales volume 10 to 15%,which will offset the 9%


OR: Positive 2022 Outlook from Revamping Oil and F&B Sales

<ul>
<li>We maintain the HOLD rating with a target price of Bt27.0, derived from  SOTP methodology. Our TP implies 26xPE’21E, or a 7% discount from the Asia-ex JP Consumer Discretionary sector. </li>
<li>The 4Q21 net profit is expected to improve QoQ on the back of recovery in oil sales volume, which dropped 6% QoQ in 3Q21 due to domestic lockdown measures </li>
<li>Meanwhile, the pressure on oil margin due to rising crude oil price and government regulation on diesel price cap, should lead to YoY earnings drop</li>
</ul>


We maintain the HOLD rating with a target price of Bt27.0, derived from  SOTP methodology. Our TP implies 26xPE’21E, or a 7% discount from the Asia-ex JP Consumer Discretionary sector. 
The 4Q21 net profit is expected to improve QoQ on the back of recovery in oil sales volume, which dropped 6% QoQ in 3Q21 due to domestic lockdown measures 
Meanwhile, the pressure on oil margin due to rising crude oil price and government regulation on diesel price cap, should lead to YoY earnings drop


OR: Revamping Oil Sales Volume to Drive 4Q21 Earnings

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)

OR : Enhanced Profitability from Non-Oil Business

We remain positive on OR’s non-oil segment (mainly café amazon) growth outlook in 2022 and ahead after the site visit at Café amazon concept store...

Pi Securities PCL, Thailand

OR : Revamping Oil Marketing Margin and Undemanding Valuation

We upgrade the recommendation to BUY from HOLD based on a revised up target price of Bt30.0 (11% up from previous Bt27.0) on the back of 10 to 36%...

Pi Securities PCL, Thailand

OR: Rising Sales and Healthy Margin in 2Q22

Yesterday analyst meeting came out in a positive tone. We maintain the HOLD rating with a target price of Bt27.0, derived from an SOTP methodology....

Pi Securities PCL, Thailand

OR: Positive 2022 Outlook from Revamping Oil and F&B Sales

Yesterday analyst meeting came out in a neutral tone, we expect the dip in oil marketing margin (diesel price cap) to persist till 1H22, while...

Pi Securities PCL, Thailand

OR: Revamping Oil Sales Volume to Drive 4Q21 Earnings

We maintain the HOLD rating with a target price of Bt27.0, derived from SOTP methodology. Our TP implies 26xPE’21E, or a 7% discount from the Asia...

Pi Securities PCL, Thailand

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