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>PTTEP’s 2Q24 NP exceeded our estimate by 12.5% due to lower- than-expected unit costs (on the back of the reversal of over- accrued exploration expenses).</li><li>Looking ahead, we expect the 2H24E earnings to weaken HoH thanks to expected QoQ lower petroleum sales volume in 3Q24E and accelerating unit costs in 2H24E.</li><li>We maintain our view calling for a flat earnings profile over the next two years. The tactical upside risk is limited, while the current valuation is attractive. </li></ul>

PTTEP’s 2Q24 NP exceeded our estimate by 12.5% due to lower- than-expected unit costs (on the back of the reversal of over- accrued exploration expenses).Looking ahead, we expect the 2H24E earnings to weaken HoH thanks to expected QoQ lower petroleum sales volume in 3Q24E and accelerating unit costs in 2H24E.We maintain our view calling for a flat earnings profile over the next two years. The tactical upside risk is limited, while the current valuation is attractive. 

PTT E&P- 2Q24 NP Beat Forecast by 12.5% on Reversal of Exploration Expenses

PTT Exploration & Production P / Equity Bottom-Up

<ul><li>PTTEP is a cyclical play whose share price shows an 80% correlation with crude oil prices.</li><li>Geopolitical risks related to the tensions in the Middle East and the production cut of OPEC+ will continue to cushion the oil price (Dubai YTD oil price at USD83.4/bbl vs. our assumption of USD84/bbl), as well as the share price (PTTEP at +1% YTD, outperforming the SETENERGY at -11.4% and the SET at -8.5%).</li><li>The valuation metrics suggest that the current valuation is attractive. </li></ul>

PTTEP is a cyclical play whose share price shows an 80% correlation with crude oil prices.Geopolitical risks related to the tensions in the Middle East and the production cut of OPEC+ will continue to cushion the oil price (Dubai YTD oil price at USD83.4/bbl vs. our assumption of USD84/bbl), as well as the share price (PTTEP at +1% YTD, outperforming the SETENERGY at -11.4% and the SET at -8.5%).The valuation metrics suggest that the current valuation is attractive. 

Ptt Exploration and Production - Stronger 2Q24E Earnings Momentum QoQ

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The June 2024 index changes for Thailand's SET 50 index were announced after market close yesterday (17th June 2024).</li>
<li>Initially we <a href="https://www.smartkarma.com/insights/quiddity-leaderboard-set50-jun-24-3-changes-likely-banpu-still-not-safe-from-deletion" target="_blank" rel="noopener">expected only three changes</a> but after the index methodology was revised in May 2024, we <a href="https://www.smartkarma.com/insights/quiddity-leaderboard-set50-jun-24-banpu-vs-sawad-has-to-be-monitored-closely" target="_blank" rel="noopener">revised our expectations</a> and we had 4 expected ADDs/DELs.</li>
<li>All 4 expected ADDs/DELs turned out to correct. In this insight, we take a look at our estimation of expected flows and potential trade ideas based on the flow dynamics.</li>
</ul>


The June 2024 index changes for Thailand's SET 50 index were announced after market close yesterday (17th June 2024).
Initially we expected only three changes but after the index methodology was revised in May 2024, we revised our expectations and we had 4 expected ADDs/DELs.
All 4 expected ADDs/DELs turned out to correct. In this insight, we take a look at our estimation of expected flows and potential trade ideas based on the flow dynamics.


Quiddity SET 50 Jun 24 Rebal: 4 Changes Confirmed; LONGs up 5.2% Vs SHORTs in a Month

<ul><li>PTTEP has acquired a 10% stake in the Ghasha Concession in UAE from Wintershall Dea Middle East GmbH.</li><li>The transaction was completed on June 11, 2024, but the transaction value has not been disclosed.</li><li>The five-year Capex plan for 2024-28E is estimated at USD2,300mn (at the PTTEP level).</li></ul>

PTTEP has acquired a 10% stake in the Ghasha Concession in UAE from Wintershall Dea Middle East GmbH.The transaction was completed on June 11, 2024, but the transaction value has not been disclosed.The five-year Capex plan for 2024-28E is estimated at USD2,300mn (at the PTTEP level).

Flash News - Ptt Exploration and Production

Thematic (Sector/Industry)

<ul><li>The prolonged interest rate upcycle and USD appreciation pose downside risks to global oil demand and crude oil prices.</li><li>Moreover, the initiation of new refining capacity is pressuring energy stock prices, especially those in the refinery sector.</li><li>Refinery stock prices have already reflected weaker refining margins and operating performance trends anticipated for 2Q24E. </li></ul>

The prolonged interest rate upcycle and USD appreciation pose downside risks to global oil demand and crude oil prices.Moreover, the initiation of new refining capacity is pressuring energy stock prices, especially those in the refinery sector.Refinery stock prices have already reflected weaker refining margins and operating performance trends anticipated for 2Q24E. 

Energy (Upstream-Downstream) - Weak 2Q24E Earnings for Refineries

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.

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PTT E&P (PTTEP TB)

PTT E&P- 2Q24 NP Beat Forecast by 12.5% on Reversal of Exploration Expenses

PTTEP’s 2Q24 NP exceeded our estimate by 12.5% due to lower- than-expected unit costs (on the back of the reversal of over- accrued exploration...

Krungthai XSpring

Ptt Exploration and Production - Stronger 2Q24E Earnings Momentum QoQ

Geopolitical risks related to the tensions in the Middle East and the production cut of OPEC+ will continue to cushion the oil price

Krungthai XSpring

Quiddity SET 50 Jun 24 Rebal: 4 Changes Confirmed; LONGs up 5.2% Vs SHORTs in a Month

Our sector-neutral trade ideas have generated a long-short return of 5.2% in a month which was significantly better than being LONG 4 Expected ADDs...

Janaghan Jeyakumar, CFA

Flash News - Ptt Exploration and Production

PTTEP has acquired a 10% stake in the Ghasha Concession in UAE from Wintershall Dea Middle East GmbH. The transaction was completed on June 11, 2024

Krungthai XSpring

Energy (Upstream-Downstream) - Weak 2Q24E Earnings for Refineries

Refinery stock prices have already reflected weaker refining margins and operating performance trends anticipated for 2Q24E.

Krungthai XSpring

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