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>Core profit and net profit in 2Q25 were 6% and 7% above expectations, respectively, but still declined YoY and QoQ.</li><li>We maintain our view expecting a downward trend in the unit margin and profit over 2025-27E, with 2Y core EPS forecast to decline at a -4.2% CAGR, amid a high correlation of around 80% between the share price and crude oil prices, which remain exposed to trade war risks.</li><li>We maintain our Neutral rating and 12M fair value at Bt112.50 (with a required return of 14.9%).</li></ul>

Core profit and net profit in 2Q25 were 6% and 7% above expectations, respectively, but still declined YoY and QoQ.We maintain our view expecting a downward trend in the unit margin and profit over 2025-27E, with 2Y core EPS forecast to decline at a -4.2% CAGR, amid a high correlation of around 80% between the share price and crude oil prices, which remain exposed to trade war risks.We maintain our Neutral rating and 12M fair value at Bt112.50 (with a required return of 14.9%).

PTT EXPLORATION AND PRODUCTION - Slightly Upbeat Core Profit

<ul><li>We expect 2Q25E profit to decline both YoY and QoQ. We also maintain our view that the unit margin and profit will remain on a downward trend during 2025-27E (with 2-year core EPS growth at a -4.2% CAGR), amid global economic fragility and weak oil demand, which continues to pressure oil prices.</li><li>PTTEP’s share price has an 80% correlation with crude oil prices, and we still see no positive catalysts.</li><li>We maintain our Neutral rating but revise down the 12M FV to Bt112.50 (from Bt115.50), based on a required return of 14.9%, reflecting adjustments to our macroeconomic assumptions (Rf, MRP) and the beta, following a change in the regression timeframe</li></ul>

We expect 2Q25E profit to decline both YoY and QoQ. We also maintain our view that the unit margin and profit will remain on a downward trend during 2025-27E (with 2-year core EPS growth at a -4.2% CAGR), amid global economic fragility and weak oil demand, which continues to pressure oil prices.PTTEP’s share price has an 80% correlation with crude oil prices, and we still see no positive catalysts.We maintain our Neutral rating but revise down the 12M FV to Bt112.50 (from Bt115.50), based on a required return of 14.9%, reflecting adjustments to our macroeconomic assumptions (Rf, MRP) and the beta, following a change in the regression timeframe

PTT Exploration and Production - Weak 2Q25E Earnings; 2Y Core Profit Growth Trending Down

<ul><li>2025 guidance – lower tone: The company lowered its Dubai crude oil price assumption to USD65-75/barrel (from USD70- 80 previously) and raised its unit costs to the upper range of USD30/boe (from USD29-30/boe previously) due to persistently high DD&amp;A expenses, in order to maintain gas production volumes for the G1/61 and G2/61 projects.</li><li>Meanwhile, the sales volume and gas price assumptions remain relatively unchanged, supporting our view that the unit margin and profit will trend downward in 2025-27E.</li><li>We maintain our 12M fair value (FV) at Bt115.50 (based on a required return of 14.9%), but we upgrade our rating to Neutral (previously Underperform) thanks to a more positive view on the current valuation (providing more upside gain on price weakness) alongside neutral tactical risks (previously limited upside risk).</li></ul>

2025 guidance – lower tone: The company lowered its Dubai crude oil price assumption to USD65-75/barrel (from USD70- 80 previously) and raised its unit costs to the upper range of USD30/boe (from USD29-30/boe previously) due to persistently high DD&amp;A expenses, in order to maintain gas production volumes for the G1/61 and G2/61 projects.Meanwhile, the sales volume and gas price assumptions remain relatively unchanged, supporting our view that the unit margin and profit will trend downward in 2025-27E.We maintain our 12M fair value (FV) at Bt115.50 (based on a required return of 14.9%), but we upgrade our rating to Neutral (previously Underperform) thanks to a more positive view on the current valuation (providing more upside gain on price weakness) alongside neutral tactical risks (previously limited upside risk).

PTT Exploration and Production - Lackluster 1Q25 Earnings; Lower Tone for 2025 Guidance

PTT Exploration & Production P / Equity Bottom-Up

<ul><li>We have revised down our 2025-27E core profit forecasts by 3-6% following a downward revision of our Dubai crude oil price assumptions, reflecting the potential negative impact of the trade war on oil demand and prices.</li><li>Core profit in 1Q25E is expected to have declined YoY and QoQ, with unit margins projected to trend downward in 2Q (due to a sharp drop in oil prices) and 4Q (owing to the lagging effect on gas prices).</li><li>We expect 2-year core EPS (2025-27E) to post a -4.2% CAGR.</li></ul>

We have revised down our 2025-27E core profit forecasts by 3-6% following a downward revision of our Dubai crude oil price assumptions, reflecting the potential negative impact of the trade war on oil demand and prices.Core profit in 1Q25E is expected to have declined YoY and QoQ, with unit margins projected to trend downward in 2Q (due to a sharp drop in oil prices) and 4Q (owing to the lagging effect on gas prices).We expect 2-year core EPS (2025-27E) to post a -4.2% CAGR.

Ptt Exploration and Production - Expect Lackluster 1Q25E Profit; Weak Momentum in 2025-27E

<ul><li>We expect 4Q24E and 2024E core profit and net profit to be unremarkable, pressured by a declining margin per unit.</li><li>We maintain our view that 2-year core EPS (2025-26E) will contract at an average of a -8% CAGR, underperforming the sector due to a downward trend in the margin per unit and slower growth in petroleum sales volume.</li><li>We maintain our Neutral rating and the fair value (FV) of Bt139.89, reflecting the weak oil market amid the oversupply trend and demand risks stemming from the US-China trade war, as well as the declining trend for the company’s 2025-26E earnings.</li></ul>

We expect 4Q24E and 2024E core profit and net profit to be unremarkable, pressured by a declining margin per unit.We maintain our view that 2-year core EPS (2025-26E) will contract at an average of a -8% CAGR, underperforming the sector due to a downward trend in the margin per unit and slower growth in petroleum sales volume.We maintain our Neutral rating and the fair value (FV) of Bt139.89, reflecting the weak oil market amid the oversupply trend and demand risks stemming from the US-China trade war, as well as the declining trend for the company’s 2025-26E earnings.

PTT Exploration and Production - Expect Unremarkable 4Q24E and 2024E Earnings

Thailand

PTT Exploration and Production Public Company Limited explores for crude oil and natural gas, develops fields for production, and produces oil and natural gas. The Company is a subsidiary of the Petroleum Authority of Thailand.

PTT Exploration & Production P (PTTEP-R TB)

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