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

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

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

Star Petroleum Refining / Equity Bottom-Up

<ul>
<li>We expect the 3Q22 earnings turn to a loss(10-Quarter low)dragged by a huge stock loss as the Dubai crude oil price plunged 10%QoQ fading off the Ukraine–Russia war risk premium. </li>
<li>Strong GRM but 3Q22 earnings to be hit by stock loss We estimate SPRC to post a net loss in 3Q22, falling from an all-time high of Bt7.2bn in 2Q22</li>
<li>The GRM in 3Q22 should decline QoQ to US7.4/bbl., leveling off from the exceptional high margin US18.9/bbl. in 2Q22 (due to supply disruption caused by Ukraine-Russia conflict).</li>
</ul>


We expect the 3Q22 earnings turn to a loss(10-Quarter low)dragged by a huge stock loss as the Dubai crude oil price plunged 10%QoQ fading off the Ukraine–Russia war risk premium. 
Strong GRM but 3Q22 earnings to be hit by stock loss We estimate SPRC to post a net loss in 3Q22, falling from an all-time high of Bt7.2bn in 2Q22
The GRM in 3Q22 should decline QoQ to US7.4/bbl., leveling off from the exceptional high margin US18.9/bbl. in 2Q22 (due to supply disruption caused by Ukraine-Russia conflict).


<ul>
<li>We reiterate the BUY call on SPRC with a TP of Bt13.5. The 2Q22 net profit surged 825% YoY and 35% QoQ to Bt7.2bn, marking a new high.</li>
<li>High GRM drove 2Q22 profit Excluding stock gain and other one-time items the recurring EBITDA grew to Bt7.7bn(&gt;1000%YoY,+142%QoQ).The significant earnings growth was driven by spike in gross refinery margin (GRM) </li>
<li>Market GRM surged to US$18.9/bbl. in 2Q22,up from US$2.6/bbl. in 2Q21 and US$8.5/bbl.in 1Q22,on the back of improved product spreads (diesel,gasoline, and jet fuel) due to tight supply from Ukraine-Russia</li>
</ul>


We reiterate the BUY call on SPRC with a TP of Bt13.5. The 2Q22 net profit surged 825% YoY and 35% QoQ to Bt7.2bn, marking a new high.
High GRM drove 2Q22 profit Excluding stock gain and other one-time items the recurring EBITDA grew to Bt7.7bn(&gt;1000%YoY,+142%QoQ).The significant earnings growth was driven by spike in gross refinery margin (GRM) 
Market GRM surged to US$18.9/bbl. in 2Q22,up from US$2.6/bbl. in 2Q21 and US$8.5/bbl.in 1Q22,on the back of improved product spreads (diesel,gasoline, and jet fuel) due to tight supply from Ukraine-Russia


SPRC : GRM Spike Drove 2Q22 Profit to New High

<ul>
<li>We reiterate the BUY call on SPRC with a TP of Bt13.5. The 2Q22 net profit is expected to surge 7x YoY and +20%QoQ to Bt6.4bn, marking a new high </li>
<li>Expect 2Q22 profit to mark a new high We estimate SPRC to post a 2Q22 net profit of Bt6.4bn (+731% YoY, +22% QoQ), a new quarterly high.The significant earnings growth</li>
<li>The refinery run rate should also inch up to 158kbd (+17% YoY, +5% QoQ), from improving domestic demand. The company will also book a stock gain of Bt1.3bn in 2Q22 </li>
</ul>


We reiterate the BUY call on SPRC with a TP of Bt13.5. The 2Q22 net profit is expected to surge 7x YoY and +20%QoQ to Bt6.4bn, marking a new high 
Expect 2Q22 profit to mark a new high We estimate SPRC to post a 2Q22 net profit of Bt6.4bn (+731% YoY, +22% QoQ), a new quarterly high.The significant earnings growth
The refinery run rate should also inch up to 158kbd (+17% YoY, +5% QoQ), from improving domestic demand. The company will also book a stock gain of Bt1.3bn in 2Q22 


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares MSCI ACWI ETF / Technical Analysis

<ul>
<li>Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.</li>
<li>On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.</li>
<li>If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.</li>
</ul>


Many indexes (ACWI-US,ACWX-US,etc.) are near support, and we could see a bear market bounce, but until these indexes reverse their downtrends and break above resistance levels, we cannot be bullish.
On a positive note, we are starting to see signs that inflation is peaking, as commodity prices have pulled back substantially, and the Energy/Materials Sectors are under significant pressure.
If inflation and commodity prices have indeed peaked, global equities are likely in the early stages of a bottoming process.


Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations

<ul>
<li>Analyst meeting came out with a positive tone. We expect the refinery margin continue to improve in 2Q22 led by solid gasoline, diesel and jet fuel spread.</li>
<li>The 1Q22 net profit spiked to an all time high of Bt5.3bn (+164% YoY, +185% QoQ), supported by higher GRM and Sales volume.</li>
<li>We expect 2Q22 recurring profit to improve on the back of rising GRM due to  Russia oil supply disruption and strong oil demand as air travel resumed after COVID impact. </li>
</ul>


Analyst meeting came out with a positive tone. We expect the refinery margin continue to improve in 2Q22 led by solid gasoline, diesel and jet fuel spread.
The 1Q22 net profit spiked to an all time high of Bt5.3bn (+164% YoY, +185% QoQ), supported by higher GRM and Sales volume.
We expect 2Q22 recurring profit to improve on the back of rising GRM due to  Russia oil supply disruption and strong oil demand as air travel resumed after COVID impact. 


SPRC: Positive 2Q22 Outlook from GRM Uptrend

Thailand

Star Petroleum Refining PCL offers  petroleum products both for domestic consumption and for export and operates a crude oil refinery. Star Petroleum Refining operates in Thailand.

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Star Petroleum Refining (SPRC TB)

SPRC : 3Q22 Earnings to Turn Loss

We expect the 3Q22 earnings turn to a loss (10-Quarter low) dragged by a huge stock loss as the Dubai crude oil price plunged 10% QoQ fading off...

Pi Securities PCL, Thailand

SPRC : GRM Spike Drove 2Q22 Profit to New High

We reiterate the BUY call on SPRC with a TP of Bt13.5. The 2Q22 net profit surged 825% YoY and 35% QoQ to Bt7.2bn, marking a new high. The result...

Pi Securities PCL, Thailand

SPRC : 2Q22 Profit to Mark New High

We reiterate the BUY call on SPRC with a TP of Bt13.5. The 2Q22 net profit is expected to surge 7x YoY and +20% QoQ to Bt6.4bn, marking a new high...

Pi Securities PCL, Thailand

Inflation Peaking?; ACWI, ACWI Ex-US Near Support; Many Bottoms-Up Stock Recommendations

We're starting to see signs that inflation is peaking, as commodity prices have pulled back substantially or are breaking, and the Energy $XLE and...

Vermilion Research

SPRC: Positive 2Q22 Outlook from GRM Uptrend

Analyst meeting came out with a positive tone. We expect the refinery margin continue to improve in 2Q22 led by solid gasoline, diesel and jet fuel...

Pi Securities PCL, Thailand

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