Thailand: PTT Global Chemical, Quality Houses, SCG Packaging Public Company Limited, Tipco Asphalt and more

In today’s briefing:

PTTGC: Weak Petrochemical Margins to Drag 4Q21 Performance

We expect PTTGC to post a weak 4Q21 net profit of Bt6.3bn (-2% YoY, -10% QoQ)
The QoQ drop will be resulted by softened petrochemical segment performance (Olefins (PE),Aromatics (PX, BZ) and Performance materials (Phenol, Propylene Oxide (PO)),which will be partially offset by improved refinery segment.
We expect the 2022 earnings to decline significantly due to absence of one-time items (gain from divestment of GPSC shares)and weak chemical product margin.However, consolidation of Allnex(acquisition completed in 4Q21)

Upgrade to BUY from HOLD rating and raise TP by 6%to Bt2.66 based on 11.8xPE’2022E, +1SD from its five-years trading average. Our rating factor in benefit from easing LTV policy
We expect the peak quarter profit in 4Q21 at Bt522 m (-10%YoY, +99%QoQ), driven by higher housing revenue recognition and rising equity income especially from HMPRO
Core operation in 4Q21 will be backed by secured backlog in 3Q21 worth Bt830m

Upgrade to BUY rating with a TP of Bt72, based on 30XPE’22E, which is derived from 2-years trailing average.The recent share price drawdown of 14% from its December 30 peak
It 4Q21 earnings were at Bt2.1bn, in-line with our projection, supported by robust revenue growth. Meanwhile, excluding extraordinary gain of Bt757m, its core profit was Bt1.4bn (-14%YoY,-2%QoQ),
SCGP’s 22E target revenue at Bt140bn (+6% from our forecast) as ASEAN Covid measures unwind would help support demand recovery. In tandem with multiple M&As consolidation and ramp-up organic growth.

Maintain HOLD rating with a TP of Bt19.80 based on 1.9xPBV’22E, -1SD of its 3-years trailing average. Our rating factors in weak 22E outlook,erode by absence of cheap crude sources
Expect 4Q21 earnings at Bt650m (-18%YoY,+72%QoQ), back by revenue growth, and 271m which is to be report under the extraordinary items
The management affirms that the availability of heavy crude oil should persist until 1Q22. In our view,this would slightly cushion the margins impact from crude price hike,which hovers around $87/BBL

Before it’s here, it’s on Smartkarma