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

PTT Exploration & Production / 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 and Production / Equity Bottom-Up

PTT Exploration and Production (PTTEP-R TB)

<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

<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

<ul><li>PTTEP is a cyclical play whose share price has a strong correlation with crude oil prices at 80%.</li><li>The tensions in the Middle East could pose significant risks to oil supply and the share price should the situation escalate into a regional war.</li><li>Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024- 26E, with limited upside in regard to the tactical risk.</li></ul>

PTTEP is a cyclical play whose share price has a strong correlation with crude oil prices at 80%.The tensions in the Middle East could pose significant risks to oil supply and the share price should the situation escalate into a regional war.Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024- 26E, with limited upside in regard to the tactical risk.

Ptt Exploration and Production -In-Line NP in 1Q24 and Stronger Momentum in 2Q24E

<ul><li>PTTEP is a cyclical play whose share price has a strong correlation with crude oil prices at 80%.</li><li>Hence, the YTD increase in crude oil prices, attributed to concerns regarding tight supply amid escalating tensions in the Middle East — particularly in the event of a direct confrontation between Israel and Iran — could act as a short-term catalyst for the share price.</li><li>Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024-26E, with limited upside in regard to the tactical risk. </li></ul>

PTTEP is a cyclical play whose share price has a strong correlation with crude oil prices at 80%.Hence, the YTD increase in crude oil prices, attributed to concerns regarding tight supply amid escalating tensions in the Middle East — particularly in the event of a direct confrontation between Israel and Iran — could act as a short-term catalyst for the share price.Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024-26E, with limited upside in regard to the tactical risk. 

Ptt Exploration and Production -Expect Flat 1Q24E NP QoQ and Stronger Momentum in 2Q24E

Thailand

PTT Exploration and Production Public Company Limited, also known as PTTEP, is a national petroleum exploration and production company. It focuses on the exploration, development, and production of petroleum, including crude oil, natural gas, condensate, and liquified petroleum gas. The company also invests in renewable energy and related businesses, such as gas pipeline transportation and solar power. Headquartered in Bangkok, Thailand, the company was founded on June 20, 1985.

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PTT Exploration and Production (PTTEP-R 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

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

Ptt Exploration and Production -In-Line NP in 1Q24 and Stronger Momentum in 2Q24E

The tensions in the Middle East could pose significant risks to oil supply and the share price should the situation escalate into a regional war.

Krungthai XSpring

Ptt Exploration and Production -Expect Flat 1Q24E NP QoQ and Stronger Momentum in 2Q24E

Our valuation metrics suggest that the stock is attractive in terms of the current valuation, amid flat EPS growth in 2024-26E, with limited upside...

Krungthai XSpring

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