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>We maintain a Neutral rating on the energy sector due to external factors, including Trump 2.0 policies, the US-China trade war, and risks from domestic government policies related to energy pricing that may pose downside risk to the 2025-26E earnings forecasts.</li><li>However, downside risks for SET ENERGY appear more limited as the implied EPS has declined near its average level, indicating that market expectations for EPS have adjusted closer to the consensus.</li><li>We reiterate our preference for downstream over upstream players and favor refiners over oil retailers. </li></ul>

We maintain a Neutral rating on the energy sector due to external factors, including Trump 2.0 policies, the US-China trade war, and risks from domestic government policies related to energy pricing that may pose downside risk to the 2025-26E earnings forecasts.However, downside risks for SET ENERGY appear more limited as the implied EPS has declined near its average level, indicating that market expectations for EPS have adjusted closer to the consensus.We reiterate our preference for downstream over upstream players and favor refiners over oil retailers. 

Energy (Upstream-Downstream) - DECEMBER 17, 2024

Equity Bottom-Up

<ul><li>3Q24 profit declined QoQ due to seasonal factors and a weaker marketing margin but showed strong YoY growth, driven by an increased oil sales volume base and robust growth in the gross profit of non-oil businesses.</li><li>We maintain our 2024-26E net profit forecasts, expecting steady profit growth over the next two years (at 10% CAGR).</li><li>The decline in the stock price already reflects the 3Q24 performance. </li></ul>

3Q24 profit declined QoQ due to seasonal factors and a weaker marketing margin but showed strong YoY growth, driven by an increased oil sales volume base and robust growth in the gross profit of non-oil businesses.We maintain our 2024-26E net profit forecasts, expecting steady profit growth over the next two years (at 10% CAGR).The decline in the stock price already reflects the 3Q24 performance. 

Ptg Energy - 3Q24 Earnings Fell QoQ (Seasonal Factors, Weak Marketing Margin)

<ul><li>We expect the 3Q24E profit to have declined QoQ due to seasonal factors and a weaker marketing margin but show strong YoY growth thanks to a higher oil sales volume base and a robust non-oil gross profit contribution.</li><li>We maintain our <span style="font-size: var(--content-font-size);">2024-26E profit forecasts, anticipating steady growth over the </span>next two years (at approximately a 10% CAGR).</li><li>We have revised our fair value to Bt10.88 (from Bt9.90 previously), based on a required return of 7.0% (7.5% previously), reflecting adjustments to the market risk premium (MRP) and the Thai 10Y bond yield in our house view.</li></ul>

We expect the 3Q24E profit to have declined QoQ due to seasonal factors and a weaker marketing margin but show strong YoY growth thanks to a higher oil sales volume base and a robust non-oil gross profit contribution.We maintain our 2024-26E profit forecasts, anticipating steady growth over the next two years (at approximately a 10% CAGR).We have revised our fair value to Bt10.88 (from Bt9.90 previously), based on a required return of 7.0% (7.5% previously), reflecting adjustments to the market risk premium (MRP) and the Thai 10Y bond yield in our house view.

PTG ENERGY - Expect 3Q24E Earnings to Have Declined QoQ...

<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>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

PTG Energy Public Company Limited consists of eight groups of businesses as follows: 1) Oil (the Company's core and original business) and Retail Business, 2) LPG Business, 3) Renewable Energy and Investment Business, 4) Logistics Business, 5) System and Equipment Management Business , 6) Food and Beverage Business 7) Auto Care and Maintenance Business, and 8) Electronic Money Business (e-Money). In this regard, the Company is determined to operate the business with the aim of satisfying consumers' needs in a comprehensive manner.

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PTG Energy PCL (PTG TB)

Energy (Upstream-Downstream) - DECEMBER 17, 2024

We reiterate our preference for downstream over upstream players and favor refiners over oil retailers. Our top pick remains BCP (Outperform; FV at...

Krungthai XSpring

Ptg Energy - 3Q24 Earnings Fell QoQ (Seasonal Factors, Weak Marketing Margin)

We maintain our 2024-26E net profit forecasts, expecting steady profit growth over the next two years (at 10% CAGR). The decline in the stock price...

Krungthai XSpring

PTG ENERGY - Expect 3Q24E Earnings to Have Declined QoQ...

We maintain our 2024-26E profit forecasts, anticipating steady growth over the next two years (at approximately a 10% CAGR).

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

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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