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

<ul><li>Given the anticipated reversal to a loss in 3Q24E (due to sustained low refining margins and stock losses), we have revised down our refining margin and earnings estimates for 2024-26E.</li><li>Core profit in 2024E is forecast to decline YoY before seeing an upward trend in 2025-26E (at 15% CAGR).</li><li>Our new fair value estimate is Bt41.35 (down from Bt43.67) with a required return of 14.8%. </li></ul>

Given the anticipated reversal to a loss in 3Q24E (due to sustained low refining margins and stock losses), we have revised down our refining margin and earnings estimates for 2024-26E.Core profit in 2024E is forecast to decline YoY before seeing an upward trend in 2025-26E (at 15% CAGR).Our new fair value estimate is Bt41.35 (down from Bt43.67) with a required return of 14.8%. 

Bangchak Corporation - Expect Net Loss in 3Q24E; Revised Down GRM/Earnings Forecasts

Thematic (Sector/Industry)

<ul><li>KTX expects the index to move in a sideways up pattern, with resistance at 1,472/1,494 points and support at 1,423/1,405 points.</li><li>Highlights impacting the market include: i) the 3Q24E earnings results (US and Thai banks); ii) US election on November 5 (Harris or Trump?); iii) results of the Bank of Thailand’s MPC meeting (first signal of a rate cut?), and iv) the Pheu Thai government gradually rolling out additional economic stimulus measures.</li><li>Risks include geopolitical tensions in the Middle East, global financial market volatility leading up to the US election, and profit taking by foreign investors after the support from the Vayupak Fund fades</li></ul>

KTX expects the index to move in a sideways up pattern, with resistance at 1,472/1,494 points and support at 1,423/1,405 points.Highlights impacting the market include: i) the 3Q24E earnings results (US and Thai banks); ii) US election on November 5 (Harris or Trump?); iii) results of the Bank of Thailand’s MPC meeting (first signal of a rate cut?), and iv) the Pheu Thai government gradually rolling out additional economic stimulus measures.Risks include geopolitical tensions in the Middle East, global financial market volatility leading up to the US election, and profit taking by foreign investors after the support from the Vayupak Fund fades

<ul><li>We have revised down our Dubai crude oil price assumptions for 2024-26E to USD80, USD75, and USD73/bbl, respectively.</li><li>The downward trend in oil prices due to global risks (e.g., increased supply and slower demand amid the unrest in the Middle East) is expected to negatively impact PTTEP, as approximately 30% of its sales volume is exposed to crude oil prices, and the stock shows a high correlation of around 0.8 with crude oil prices.</li><li>For the refinery sector, we anticipate short-term negative effects, likely due to inventory losses in 3Q24E from the sharp decline in crude oil prices, against a neutral impact in the medium term given declining crude oil costs and crude premiums. </li></ul>

We have revised down our Dubai crude oil price assumptions for 2024-26E to USD80, USD75, and USD73/bbl, respectively.The downward trend in oil prices due to global risks (e.g., increased supply and slower demand amid the unrest in the Middle East) is expected to negatively impact PTTEP, as approximately 30% of its sales volume is exposed to crude oil prices, and the stock shows a high correlation of around 0.8 with crude oil prices.For the refinery sector, we anticipate short-term negative effects, likely due to inventory losses in 3Q24E from the sharp decline in crude oil prices, against a neutral impact in the medium term given declining crude oil costs and crude premiums. 

Industry Update: Energy (Oil) - SEPTEMBER 30, 2024

<ul><li>KTX expects that the sale of Type A investment units of the Vayupak 1 Fund (VAYU1), scheduled for September 16-20, will meet the target of Bt150bn, with Bt50bn from individual investors and Bt100bn from institutional investors. (Note: these proportions may vary slightly depending on the authorities' discretion.)</li><li>The fund guarantees the principal and offers a minimum annual return of 3% (up to a maximum of 9%) over 10 years.</li><li>This attractive return, combined with high liquidity, is expected to encourage individual investors to shift funds from bank deposits to VAYU1 for better returns. </li></ul>

KTX expects that the sale of Type A investment units of the Vayupak 1 Fund (VAYU1), scheduled for September 16-20, will meet the target of Bt150bn, with Bt50bn from individual investors and Bt100bn from institutional investors. (Note: these proportions may vary slightly depending on the authorities' discretion.)The fund guarantees the principal and offers a minimum annual return of 3% (up to a maximum of 9%) over 10 years.This attractive return, combined with high liquidity, is expected to encourage individual investors to shift funds from bank deposits to VAYU1 for better returns. 

Special Report – Vayupak Fund 1 (VAYU1)

<ul>
<li>We expect the energy sector to deliver a mixed performance in 3Q24E.</li>
<li>We maintain a Neutral investment rating on the sector, reflecting weak industry indicators in 2H24E (e.g., oil prices, refining margins, marketing margins).</li>
<li>In addition, we downgrade our recommendation for refinery stocks (BCP and TOP) to Outperform (from Buy) due to tactical factors, as their share prices have risen in line with improving refining margins. </li>
</ul>


We expect the energy sector to deliver a mixed performance in 3Q24E.
We maintain a Neutral investment rating on the sector, reflecting weak industry indicators in 2H24E (e.g., oil prices, refining margins, marketing margins).
In addition, we downgrade our recommendation for refinery stocks (BCP and TOP) to Outperform (from Buy) due to tactical factors, as their share prices have risen in line with improving refining margins. 


Industry Update - Energy (Upstream-Downstream)

Thailand

Bangchak Corporation Public Company Limited operates as an energy company. The Company offers petroleum exploration and production, biomass, crude oil, and solar energy. Bangchak markets its products in Thailand.

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Bangchak Corporation (BCP TB)

Bangchak Corporation - Expect Net Loss in 3Q24E; Revised Down GRM/Earnings Forecasts

Given the anticipated reversal to a loss in 3Q24E (due to sustained low refining margins and stock losses), we have revised down our refining...

Krungthai XSpring

Monthly Report: October 2024

KTX expects the index to move in a sideways up pattern, with resistance at 1,472/1,494 points and support at 1,423/1,405 points.

Krungthai XSpring

Industry Update: Energy (Oil) - SEPTEMBER 30, 2024

The downward trend in oil prices due to global risks (e.g., increased supply and slower demand amid the unrest in the Middle East) is expected to...

Krungthai XSpring

Special Report – Vayupak Fund 1 (VAYU1)

KTX expects that the sale of Type A investment units of the Vayupak 1 Fund (VAYU1), scheduled for September 16-20, will meet the target of Bt150bn

Krungthai XSpring

Industry Update - Energy (Upstream-Downstream)

We maintain a Neutral investment rating on the sector, reflecting weak industry indicators in 2H24E (e.g., oil prices, refining margins, marketing...

Krungthai XSpring

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