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>The challenging marketing margin has already been priced in.</li><li>Meanwhile, the growth momentum of oil sales volume and non-oil businesses, driven by repeated uses by PT Max members in all platforms at around 20mn members, as well as lower SG&amp;A/liter (thanks to higher sales volume), will cushion the earnings performance for the year.</li><li>We maintain our 2024-26E NP forecasts calling for a 10% CAGR. </li></ul>

The challenging marketing margin has already been priced in.Meanwhile, the growth momentum of oil sales volume and non-oil businesses, driven by repeated uses by PT Max members in all platforms at around 20mn members, as well as lower SG&amp;A/liter (thanks to higher sales volume), will cushion the earnings performance for the year.We maintain our 2024-26E NP forecasts calling for a 10% CAGR. 

Ptg Energy - In-Line 1Q24 NP with Mixed Factors; Challenging Marketing Margin

<ul><li>We expect oil retailers to continue facing challenging marketing margins in 2024E, especially amid the uptrend of global oil prices.</li><li>Meanwhile, the growth momentum of oil sales volume and non-oil businesses, as well as lower SG&amp;A/liter (thanks to high sales volume), will cushion the earnings performance for the year.</li><li>We maintain our 2024E net profit forecast of Bt960mn (flat YoY) and a Neutral rating (FV: Bt9.20).</li></ul>

We expect oil retailers to continue facing challenging marketing margins in 2024E, especially amid the uptrend of global oil prices.Meanwhile, the growth momentum of oil sales volume and non-oil businesses, as well as lower SG&amp;A/liter (thanks to high sales volume), will cushion the earnings performance for the year.We maintain our 2024E net profit forecast of Bt960mn (flat YoY) and a Neutral rating (FV: Bt9.20).

Ptg Energy -Mixed Factors in 1Q24E; Challenging Marketing Margin

<ul><li>Despite the upbeat 4Q23 earnings and PTG’s 2024 business targets with proactive momentum, we view that its 2024E earnings performance may be pressured by the challenges to the marketing margin faced during the year, especially given the incremental costs for quality improvement to the Euro 5 standard amid the capped retail prices for diesel, which constitutes 70% of the firm’s total oil sales volume.</li><li>In addition, the potential returns from the new businesses — hire purchase loans for second-hand trucks and waste management — may remain unattractive.</li><li>We maintain our Neutral rating, with the 12M FV at Bt9.18.</li></ul>

Despite the upbeat 4Q23 earnings and PTG’s 2024 business targets with proactive momentum, we view that its 2024E earnings performance may be pressured by the challenges to the marketing margin faced during the year, especially given the incremental costs for quality improvement to the Euro 5 standard amid the capped retail prices for diesel, which constitutes 70% of the firm’s total oil sales volume.In addition, the potential returns from the new businesses — hire purchase loans for second-hand trucks and waste management — may remain unattractive.We maintain our Neutral rating, with the 12M FV at Bt9.18.

PTG Energy - Upbeat 4Q23 Earnings; Marketing Margin to Remain Key Challenge

<ul><li>Despite expected strong 4Q23E earnings (i.e., the best quarter of the year), we view that the share price may be pressured by the challenges to the marketing margin in 2024E (the firm lowered its expectations for the marketing margin to Bt1.7-1.8/liter), especially given the incremental costs for quality improvement to the Euro 5 standard amid the capped retail prices for diesel, which constitutes 70% of the firm’s total oil sales volume.</li><li>In addition, the new businesses — hire purchase loans for second- hand trucks and waste management — may not yet generate significant earnings contributions.</li><li>We maintain our Neutral rating, with the 12M FV at Bt9.18. Our valuation metrics suggest a neutral view on the current valuation, the long-term growth prospects, and the tactical risk.</li></ul>

Despite expected strong 4Q23E earnings (i.e., the best quarter of the year), we view that the share price may be pressured by the challenges to the marketing margin in 2024E (the firm lowered its expectations for the marketing margin to Bt1.7-1.8/liter), especially given the incremental costs for quality improvement to the Euro 5 standard amid the capped retail prices for diesel, which constitutes 70% of the firm’s total oil sales volume.In addition, the new businesses — hire purchase loans for second- hand trucks and waste management — may not yet generate significant earnings contributions.We maintain our Neutral rating, with the 12M FV at Bt9.18. Our valuation metrics suggest a neutral view on the current valuation, the long-term growth prospects, and the tactical risk.

Ptg Energy - Solid 4Q23E Earnings; Marketing Margin to Remain Key Challenge

<ul><li>Given the possible disappointing 2Q23E earnings and challenging marketing margins, we revise down our NP estimates by 30% in 2023E and by 13-15% in 2024-25E.</li><li>We also trimmed the 12M FV to Bt11.50, based on the earnings yield under a required rate of return of 5.9%.</li><li>The valuation metrics suggest that the current valuation is fully valued, while the long-term growth prospects are strong, and the tactical risk indicates very limited downside.</li></ul>

Given the possible disappointing 2Q23E earnings and challenging marketing margins, we revise down our NP estimates by 30% in 2023E and by 13-15% in 2024-25E.We also trimmed the 12M FV to Bt11.50, based on the earnings yield under a required rate of return of 5.9%.The valuation metrics suggest that the current valuation is fully valued, while the long-term growth prospects are strong, and the tactical risk indicates very limited downside.

PTG Energy - Likely Downbeat 2Q23E Earnings; Earnings Cut

Thailand

PTG Energy PCL provides ready-made gasoline at retail stations. The Company operates gasoline tank farms and gasoline retail stations throughout Thailand.

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PTG Energy PCL (PTG TB)

Ptg Energy - In-Line 1Q24 NP with Mixed Factors; Challenging Marketing Margin

The share price decline implies an attractive current valuation, amid very limited tactical downside risk. We switch to an Outperform rating but...

Krungthai XSpring

Ptg Energy -Mixed Factors in 1Q24E; Challenging Marketing Margin

Meanwhile, the growth momentum of oil sales volume and non-oil businesses, as well as lower SG&A/liter (thanks to high sales volume), will cushion...

Krungthai XSpring

PTG Energy - Upbeat 4Q23 Earnings; Marketing Margin to Remain Key Challenge

In addition, the potential returns from the new businesses — hire purchase loans for second-hand trucks and waste management — may remain...

Krungthai XSpring

Ptg Energy - Solid 4Q23E Earnings; Marketing Margin to Remain Key Challenge

We maintain our Neutral rating, with the 12M FV at Bt9.18. Our valuation metrics suggest a neutral view on the current valuation, the long-term...

Krungthai XSpring

PTG Energy - Likely Downbeat 2Q23E Earnings; Earnings Cut

Given the possible disappointing 2Q23E earnings and challenging marketing margins, we revise down our NP estimates by 30% in 2023E and by 13-15% in...

Krungthai XSpring

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