IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

PTT Oil and Retail Business / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/ptt-oil-and-retail" target="_blank" data-smartkarma-citation="entities:28939:1" rel="noopener">PTT Oil and Retail (OR TB)</a>/PTTOR is the flagship company for the oil and retail business of <a href="https://www.smartkarma.com/entities/ptt-pcl" target="_blank" data-smartkarma-citation="entities:197:1" rel="noopener">PTT PCL (PTT TB)</a> in Thailand and in the Southeast Asia region such as Cambodia, Laos, Myanmar and Philippines. PTTOR is the largest player in Thailand’s fuel retail market. PTTOR priced its IPO at THB18.00 per share, at the upper end of its IPO price range of THB16.00-18.00 per share. The shares are set to start trading on Thursday, 11 February. </p></div><div>
<p>In <a href="https://www.smartkarma.com/insights/ptt-oil-and-retail-pttor-ipo-initiation-octane-ratings" target="_blank" data-smartkarma-citation="insights:46230" rel="noopener">PTT Oil and Retail (PTTOR) IPO Initiation: Octane Ratings</a>, we stated that PTTOR remains a market-leading business and well-placed to ride the recovery in oil prices, easing of lockdown restrictions and consumer confidence.</p>
<div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/ptt-oil-and-retail-pttor-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:47147" rel="noopener">PTT Oil and Retail (PTTOR) IPO: Valuation Insights</a>, we opined that a reasonable P/E valuation and solid cornerstone support makes PTTOR tempting at the proposed pricing range. Our base-case DCF derived price target of THB22.20 per share. Our valuation analysis shows that the IPO price remains attractive.</p></div>
</div>

PTT Oil and Retail (OR TB)/PTTOR is the flagship company for the oil and retail business of PTT PCL (PTT TB) in Thailand and in the Southeast Asia region such as Cambodia, Laos, Myanmar and Philippines. PTTOR is the largest player in Thailand’s fuel retail market. PTTOR priced its IPO at THB18.00 per share, at the upper end of its IPO price range of THB16.00-18.00 per share. The shares are set to start trading on Thursday, 11 February. 
In PTT Oil and Retail (PTTOR) IPO Initiation: Octane Ratings, we stated that PTTOR remains a market-leading business and well-placed to ride the recovery in oil prices, easing of lockdown restrictions and consumer confidence.
In PTT Oil and Retail (PTTOR) IPO: Valuation Insights, we opined that a reasonable P/E valuation and solid cornerstone support makes PTTOR tempting at the proposed pricing range. Our base-case DCF derived price target of THB22.20 per share. Our valuation analysis shows that the IPO price remains attractive.


PTT Oil and Retail (PTTOR) IPO: Trading Debut

<div><p><a href="https://www.smartkarma.com/entities/ptt-oil-and-retail" target="_blank" data-smartkarma-citation="entities:28939:1" rel="noopener">PTT Oil and Retail (OR TB)</a>/PTTOR is the flagship company for the oil and retail business of <a href="https://www.smartkarma.com/entities/ptt-pcl" target="_blank" data-smartkarma-citation="entities:197:1" rel="noopener">PTT PCL (PTT TB)</a> in Thailand and in the Southeast Asia region such as Cambodia, Laos, Myanmar and Philippines. PTTOR is the largest player in Thailand’s fuel retail market.</p></div><div><p>PTTOR has launched its IPO at a price range of THB16.00-18.00 per share to raise as much as THB47.0 billion ($1.6 billion). Cornerstone investors will account for around two-thirds of the offer shares. Nine international cornerstones which include Fidelity, JP Morgan Asset Management and GIC will take up $270 million of the offer shares. Nineteen domestic cornerstone investors will take up $758 million of the offer shares. The books will open on 22 January and the first day of trading is set for 11 February. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/ptt-oil-and-retail-pttor-ipo-initiation-octane-ratings" target="_blank" data-smartkarma-citation="insights:46230" rel="noopener">PTT Oil and Retail (PTTOR) IPO Initiation: Octane Ratings</a>, we stated that PTTOR remains a market-leading business and well-placed to ride the recovery in oil prices, easing of lockdown restrictions and consumer confidence. Overall, we think that a reasonable P/E valuation and solid cornerstone support makes PTTOR tempting at the proposed pricing range. </p></div></div></div>

PTT Oil and Retail (OR TB)/PTTOR is the flagship company for the oil and retail business of PTT PCL (PTT TB) in Thailand and in the Southeast Asia region such as Cambodia, Laos, Myanmar and Philippines. PTTOR is the largest player in Thailand’s fuel retail market.PTTOR has launched its IPO at a price range of THB16.00-18.00 per share to raise as much as THB47.0 billion ($1.6 billion). Cornerstone investors will account for around two-thirds of the offer shares. Nine international cornerstones which include Fidelity, JP Morgan Asset Management and GIC will take up $270 million of the offer shares. Nineteen domestic cornerstone investors will take up $758 million of the offer shares. The books will open on 22 January and the first day of trading is set for 11 February. In PTT Oil and Retail (PTTOR) IPO Initiation: Octane Ratings, we stated that PTTOR remains a market-leading business and well-placed to ride the recovery in oil prices, easing of lockdown restrictions and consumer confidence. Overall, we think that a reasonable P/E valuation and solid cornerstone support makes PTTOR tempting at the proposed pricing range. 

PTT Oil and Retail (PTTOR) IPO: Valuation Insights

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

<p>We revise down company’s earning to the loss of Bt956m in 2020E and also trim our target price by 50% to Bt5.7 (from Bt11.6), derived from 0.8xPBV’20E which is -2SD to its 5 year average. We maintain a ‘BUY’ recommendation as we believe current valuation is quite cheap.</p><p>The story:</p><div>• Revise earnings down as refinery margin collapse</div><div>• Petroleum consumption remain weak in 2Q20E</div><div>• Strong balance sheet, compared to peers</div>

We revise down company’s earning to the loss of Bt956m in 2020E and also trim our target price by 50% to Bt5.7 (from Bt11.6), derived from 0.8xPBV’20E which is -2SD to its 5 year average. We maintain a ‘BUY’ recommendation as we believe current valuation is quite cheap.The story:• Revise earnings down as refinery margin collapse• Petroleum consumption remain weak in 2Q20E• Strong balance sheet, compared to peers

<p><strong>Yesterday analysts meeting came out with a positive tone. We maintain our BUY rating and a target price of Bt33 based on SOTP, implying to 1xPBV’20E.</strong></p><p><strong>Key takeaway:</strong></p><ul>
<li>Expect 4Q19 earnings to grow YoY and QoQ backed by a recovery in refinery business.</li>
<li><span>Trimmed 2019E earnings forecast by 33% to factor in higher stock loss than expectation.</span></li>
<li>We forecast 2020E earnings to grow 87%YoY and maintain our positive view toward its 2019-2021 earnings backed by better demand outlook derived from IMO regulation applied in Jan 2020 and 17% capacity expansion by 2021.</li>
</ul><p><strong>Upside risk:</strong> An IPO of Saudi Aramco in December might have positive sentiment toward crude price which could have low pressure to its stock loss.</p><p><strong>Background:</strong> Established in 1940, Bangchak Corporation Public Company Limited and its subsidiaries ‘ operations include refinery, oil trading, petroleum product marketing and renewable energy businesses. With a capacity of 120,000 barrels per day, Bangchak produces and distributes its products through more than 1,000 service stations nationwide. It also plans to expand the scope of its business to cover food and convenience stores and novel product businesses and to seek investment opportunities in bio-based products and natural resource businesses.</p>

Yesterday analysts meeting came out with a positive tone. We maintain our BUY rating and a target price of Bt33 based on SOTP, implying to 1xPBV’20E.Key takeaway:
Expect 4Q19 earnings to grow YoY and QoQ backed by a recovery in refinery business.
Trimmed 2019E earnings forecast by 33% to factor in higher stock loss than expectation.
We forecast 2020E earnings to grow 87%YoY and maintain our positive view toward its 2019-2021 earnings backed by better demand outlook derived from IMO regulation applied in Jan 2020 and 17% capacity expansion by 2021.
Upside risk: An IPO of Saudi Aramco in December might have positive sentiment toward crude price which could have low pressure to its stock loss.Background: Established in 1940, Bangchak Corporation Public Company Limited and its subsidiaries ‘ operations include refinery, oil trading, petroleum product marketing and renewable energy businesses. With a capacity of 120,000 barrels per day, Bangchak produces and distributes its products through more than 1,000 service stations nationwide. It also plans to expand the scope of its business to cover food and convenience stores and novel product businesses and to seek investment opportunities in bio-based products and natural resource businesses.

BCP: Better Refinery Outlook in 4Q19 and Beyond

<p><strong>We initiate coverage of BCP with a BUY rating, based on a target price of Bt41, which is derived from a sum-of-the-parts (SOTP) methodology and imply to 10.2xPE’19E to bring it in line with the Thai energy sector. </strong></p>
<p><strong> </strong><strong>The story:</strong></p>
<ul>
<li>Attractive dividend yield of 6-7% a year</li>
<li>Refining business set to recover in 2019</li>
<li>Hidden value from non-core business</li>
</ul>
<p><strong>Risks:</strong></p>
<ul>
<li>Raw material price fluctuation</li>
<li>Possibility of impairment losses from investment projects</li>
</ul>
<p><strong>Background: </strong>Established in 1940, Bangchak Corporation Public Company Limited and its subsidiaries ‘ operations include refinery, oil trading, petroleum product marketing and renewable energy businesses. With a capacity of 120,000 barrels per day, Bangchak produces and distributes its products through more than 1,000 service stations nationwide. It also plans to expand the scope of its business to cover food and convenience stores and novel product businesses and to seek investment opportunities in bio-based products and natural resource businesses.</p>

We initiate coverage of BCP with a BUY rating, based on a target price of Bt41, which is derived from a sum-of-the-parts (SOTP) methodology and imply to 10.2xPE’19E to bring it in line with the Thai energy sector. 
 The story:

Attractive dividend yield of 6-7% a year
Refining business set to recover in 2019
Hidden value from non-core business

Risks:

Raw material price fluctuation
Possibility of impairment losses from investment projects

Background: Established in 1940, Bangchak Corporation Public Company Limited and its subsidiaries ‘ operations include refinery, oil trading, petroleum product marketing and renewable energy businesses. With a capacity of 120,000 barrels per day, Bangchak produces and distributes its products through more than 1,000 service stations nationwide. It also plans to expand the scope of its business to cover food and convenience stores and novel product businesses and to seek investment opportunities in bio-based products and natural resource businesses.

BCP: More Stable Income with an Attractive Yield

Thailand

Bangchak Sriracha is an integrated petroleum refining and distribution business. The company operates a complex refinery in Sriracha, Chonburi province, producing refined petroleum products such as liquefied petroleum gas, gasoline, jet fuel, diesel, and asphalt, along with aromatics and chemical products. It distributes these products through its network of retail service stations under the "Bangchak" brand and to commercial customers. The company is headquartered in Bangkok, Thailand, and was incorporated in 1965.

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Bangchak Sriracha (ESSO TB)

PTT Oil and Retail (PTTOR) IPO: Trading Debut

PTTOR priced its IPO at THB18.00 per share and the shares are set to start trading on 11 February. Our valuation analysis shows that the IPO price...

Arun George

PTT Oil and Retail (PTTOR) IPO: Valuation Insights

PTTOR has launched its IPO to raise as much as THB47.0 billion ($1.6 billion). A reasonable P/E valuation and solid cornerstone support make PTTOR...

Arun George

SPRC: A Harsh Year for Refineries

We revise down company’s earning to the loss of Bt956m in 2020E and also trim our target price by 50% to Bt5.7 (from Bt11.6), derived from...

Pi Securities PCL, Thailand

BCP: Better Refinery Outlook in 4Q19 and Beyond

Yesterday analysts meeting came out with a positive tone. We maintain our BUY rating and a target price of Bt33 based on SOTP, implying to...

Pi Securities PCL, Thailand

BCP: More Stable Income with an Attractive Yield

We initiate coverage of BCP with a BUY rating, based on a target price of Bt41, which is derived from a sum-of-the-parts (SOTP) methodology and...

Pi Securities PCL, Thailand

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