Thai Equity - Bottom-up - Equities, Pi Securities PCL, Thailand

Pi Research

Thai Equity - Bottom-up - Equities

Leading, full-service investment firm in Thailand

Pi Securities PCL, Thailand

Pi Securities is a well known securities company with 40 years experience in the industry, serving more than 60,000 clients. We offer one - stop service providing full range of financial products and services including extensive Brokerage, Proprietary Trading (Equities and Bonds), Advisory Services, Structured Products.

Moreover, our new research team tailored for institutional clients to focus on mid to small cap of Thai equities and trading strategies. Our services offered to our premium clients also include arrangement of company or site visits to with the managements of Thai listed companies.

Note: Effective on 1 March 2022, Country Group Securities PCL changed its name to Pi Securities

Equity Bottom-Up

<ul>
<li>We maintain the BUY call with a target price of Bt71. The 2Q22 net profit rose +10x YoY and +2.5x QoQ to Bt25.3bn, a new quarterly high</li>
<li>Strong refinery performance drove 2Q22 profit The 2Q22 net profit rose +10x YoY and +2.5xQoQ to Bt25.3bn, a new quarterly high.The result came out better than market expectation and 12% </li>
<li>Excluding the extra items viz, divestment of GPSC stake (Bt17.3bn), stock gain (Bt7.6bn), Hedging (-Bt10.3bn) and FX loss (-Bt1.3bn), the recurring profit stood at Bt14.7bn (+10x YoY, +2.5x QoQ). </li>
</ul>


We maintain the BUY call with a target price of Bt71. The 2Q22 net profit rose +10x YoY and +2.5x QoQ to Bt25.3bn, a new quarterly high
Strong refinery performance drove 2Q22 profit The 2Q22 net profit rose +10x YoY and +2.5xQoQ to Bt25.3bn, a new quarterly high.The result came out better than market expectation and 12% 
Excluding the extra items viz, divestment of GPSC stake (Bt17.3bn), stock gain (Bt7.6bn), Hedging (-Bt10.3bn) and FX loss (-Bt1.3bn), the recurring profit stood at Bt14.7bn (+10x YoY, +2.5x QoQ). 


TOP : Strong Refinery Performance & Extra Gain Drove 2Q22 Profit

<ul>
<li>We have a positive view on the 2Q22 earnings performance as the net profit is expected to surge +10x YoY and+2xQoQ to Bt22.5bn, mainly driven by an all-time high GRM</li>
<li>Bright 2Q22 earnings outlook We estimate TOP to post 2Q22 net profit of Bt22.5bn (+962% YoY, +214% QoQ).The significant earnings growth will be supported by an all-time high gross refinery</li>
<li>The strong refinery performance should aid the group’s gross integrated margin rise to US$24/bbl (up from US$7.6/bbl in 1Q22),despite the weak contribution from aromatics &amp; LAB segment as the product </li>
</ul>


We have a positive view on the 2Q22 earnings performance as the net profit is expected to surge +10x YoY and+2xQoQ to Bt22.5bn, mainly driven by an all-time high GRM
Bright 2Q22 earnings outlook We estimate TOP to post 2Q22 net profit of Bt22.5bn (+962% YoY, +214% QoQ).The significant earnings growth will be supported by an all-time high gross refinery
The strong refinery performance should aid the group’s gross integrated margin rise to US$24/bbl (up from US$7.6/bbl in 1Q22),despite the weak contribution from aromatics &amp; LAB segment as the product 


<ul>
<li>TOP reported 1Q22 net profit of Bt7.2bn (+114% YoY, +43% QoQ),a 5-quarter high, driven by strong refinery segment performance and stock gain. The result came out better than our expectation.</li>
<li>The accounting EBITDA spiked to Bt13.0bn(+58% YoY,+114% QoQ).Despite the weak performance of petrochemical,power and other segments, the strong refinery segment (+124% YoY, +178% QoQ) operation under pinned the overall growth.</li>
<li>Positive 2Q22 outlook, The strong GRM should continue in 2Q22 and ahead backed by solid gasoline, jet fuel and diesel spreads from global economic recovery.</li>
</ul>


TOP reported 1Q22 net profit of Bt7.2bn (+114% YoY, +43% QoQ),a 5-quarter high, driven by strong refinery segment performance and stock gain. The result came out better than our expectation.
The accounting EBITDA spiked to Bt13.0bn(+58% YoY,+114% QoQ).Despite the weak performance of petrochemical,power and other segments, the strong refinery segment (+124% YoY, +178% QoQ) operation under pinned the overall growth.
Positive 2Q22 outlook, The strong GRM should continue in 2Q22 and ahead backed by solid gasoline, jet fuel and diesel spreads from global economic recovery.


TOP: Solid Refinery Performance Drove 1Q22 Profit

<ul>
<li>The BOD approved TOP’s recapitalization plan which includes 1)disposal of GPSC stake (by 2Q22) and 2) capital increase (within 2022). The proceeds will be used for repaying bridge loans raised</li>
<li>The company will raise around Bt22.4bn by sale of its 10.78% stake in GPSC. And around Bt12-to-14bn by equity offering of up to 239.2m newly issued shares with green shoe</li>
<li>Positive view on recapitalization plan, given the investment in CAP will provide an entry to high potential Olefin's business segment. Also,We see the net EPS dilution to be below 5%</li>
</ul>


The BOD approved TOP’s recapitalization plan which includes 1)disposal of GPSC stake (by 2Q22) and 2) capital increase (within 2022). The proceeds will be used for repaying bridge loans raised
The company will raise around Bt22.4bn by sale of its 10.78% stake in GPSC. And around Bt12-to-14bn by equity offering of up to 239.2m newly issued shares with green shoe
Positive view on recapitalization plan, given the investment in CAP will provide an entry to high potential Olefin's business segment. Also,We see the net EPS dilution to be below 5%


<ul>
<li>We expect TOP to post a solid 4Q21 net profit of Bt5.1bn (-30% YoY, +146% QoQ).</li>
<li>The growth will be supported by solid spike in GRM. which should increase to US$5.5/bbl, up from US$1.2/bbl in 4Q20 and US$1.6/bbl in 3Q21,backed by strong rise in product spreads</li>
<li>The Aromatics &amp; LAB, and Lube base oil contribution should soften QoQ due to 25 to 50%decline in product spreads.However, overall base GIM should increase to US$7.1/bbl,(+97% YoY, +29% QoQ).</li>
</ul>


We expect TOP to post a solid 4Q21 net profit of Bt5.1bn (-30% YoY, +146% QoQ).
The growth will be supported by solid spike in GRM. which should increase to US$5.5/bbl, up from US$1.2/bbl in 4Q20 and US$1.6/bbl in 3Q21,backed by strong rise in product spreads
The Aromatics &amp; LAB, and Lube base oil contribution should soften QoQ due to 25 to 50%decline in product spreads.However, overall base GIM should increase to US$7.1/bbl,(+97% YoY, +29% QoQ).


TOP: Solid Refinery Margin to Drive 4Q21 Performance

Thailand

Thai Oil is an integrated energy company engaged in oil refining and petrochemicals, producing a diverse range of products including refined fuels, petrochemicals, and base lubricating oils. It operates one of the leading complex refineries in Asia Pacific with a current capacity of 275,000 barrels per day. The company was founded in 1961 and is headquartered in Bangkok, Thailand.

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Thai Oil (TOP-R TB)

TOP : Strong Refinery Performance & Extra Gain Drove 2Q22 Profit

We maintain the BUY call with a target price of Bt71. The 2Q22 net profit rose +10x YoY and +2.5x QoQ to Bt25.3bn, a new quarterly high, mainly...

Pi Securities PCL, Thailand

TOP : Strong 2Q22 Performance Outlook

We have a positive view on the 2Q22 earnings performance as the net profit is expected to surge +10x YoY and +2x QoQ to Bt22.5bn, mainly driven by...

Pi Securities PCL, Thailand

TOP: Solid Refinery Performance Drove 1Q22 Profit

TOP reported 1Q22 net profit of Bt7.2bn (+114% YoY, +43% QoQ), a 5-quarter high, driven by strong refinery segment performance and stock gain. The...

Pi Securities PCL, Thailand

TOP: Capital Increase Within 2022

The BOD approved TOP’s recapitalization plan which includes 1) disposal of GPSC stake (by 2Q22) and 2) capital increase (within 2022). The proceeds...

Pi Securities PCL, Thailand

TOP: Solid Refinery Margin to Drive 4Q21 Performance

We expect TOP to post a solid 4Q21 net profit of Bt5.1bn (-30% YoY, +146% QoQ). •The growth will be supported by solid spike in GRM. which should...

Pi Securities PCL, Thailand

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