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.

Thematic (Sector/Industry)

<ul><li>The SET fell in line with Asian bourses as a selling force continued to target large cap shares, causing the index to hit a 39-month low.</li><li>However, it subsequently improved slightly after the market shifted its focus to small to medium cap stocks, alongside expectations for an interest rate cut by the MPC due to the continued contraction of Thai inflation.</li><li>Despite the index experiencing a further decline, a doji signal emerged at the support area, mitigating the negative signal from the preceding black candlestick.</li></ul>

The SET fell in line with Asian bourses as a selling force continued to target large cap shares, causing the index to hit a 39-month low.However, it subsequently improved slightly after the market shifted its focus to small to medium cap stocks, alongside expectations for an interest rate cut by the MPC due to the continued contraction of Thai inflation.Despite the index experiencing a further decline, a doji signal emerged at the support area, mitigating the negative signal from the preceding black candlestick.

<ul><li>The Oil Fund will be used as the mechanism to cap the diesel price after the Bt5/liter excise tax reduction scheme expires on July 20, 2023, which is not a surprise to the market.</li><li>The financial position of the Oil Fund is at a manageable level.</li><li>The marketing margin being left untouched eases concern and is likely to create positive sentiment for oil retailers, especially PTG, whose exposure to diesel volume sold through oil service stations is higher than peers at 77% (vs. 45-57% for peers). </li></ul>

The Oil Fund will be used as the mechanism to cap the diesel price after the Bt5/liter excise tax reduction scheme expires on July 20, 2023, which is not a surprise to the market.The financial position of the Oil Fund is at a manageable level.The marketing margin being left untouched eases concern and is likely to create positive sentiment for oil retailers, especially PTG, whose exposure to diesel volume sold through oil service stations is higher than peers at 77% (vs. 45-57% for peers). 

Industry Update – Energy (Oil Retailers)

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 maintain the BUY call with a target price of Bt13.50. SPRC reported a net loss of Bt5.0bn in 3Q22 (compared to a profit both YoY and QoQ), mainly dragged </li>
<li>3Q22 earnings hit by stock loss and weak GRM SPRC reported a net loss ofBt5.0bn in 3Q22,falling from an all-time high profit of Bt7.2bn in 2Q22 and Bt113m in 3Q21. </li>
<li>The earnings plunge was due to dip in accounting gross refinery margin (GRM) which fall to US$-7.34/bbl. compared to US$22.9/bbl. in 2Q22 and US$4.38/bbl.</li>
</ul>


We maintain the BUY call with a target price of Bt13.50. SPRC reported a net loss of Bt5.0bn in 3Q22 (compared to a profit both YoY and QoQ), mainly dragged 
3Q22 earnings hit by stock loss and weak GRM SPRC reported a net loss ofBt5.0bn in 3Q22,falling from an all-time high profit of Bt7.2bn in 2Q22 and Bt113m in 3Q21. 
The earnings plunge was due to dip in accounting gross refinery margin (GRM) which fall to US$-7.34/bbl. compared to US$22.9/bbl. in 2Q22 and US$4.38/bbl.


SPRC : Expect Earning S to Turnaround in 4Q22

<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

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)

Technical Analysis - MARCH 6, 2024

The SET fell in line with Asian bourses as a selling force continued to target large cap shares, causing the index to hit a 39-month low.

Krungthai XSpring

Industry Update – Energy (Oil Retailers)

The Oil Fund will be used as the mechanism to cap the diesel price after the Bt5/liter excise tax reduction scheme expires on July 20, 2023, which...

Krungthai XSpring

SPRC : Expect Earning S to Turnaround in 4Q22

We maintain the BUY call with a target price of Bt13.50.SPRC reported a net loss ofBt5.0bn in 3Q22(compared to a profit both YoY and QoQ),mainly...

Pi Securities PCL, Thailand

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

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