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>We retain our positive view on the gross refining margin (GRM) in 2024E, driven by sustained high crack spreads of middle distillates (TOP’s yield for this product is around 55%).</li><li>The GRM momentum is expected to continue in 2025E given lower new refining capacity, which will align with the planned commercial commencement of TOP’s Clean Fuel Project (CFP) in the same year.</li><li>This is expected to foster LT EPS growth at a 23% CAGR during 2024-26E. We maintain an Outperform rating and the 12M FV of Bt62.4.</li></ul>

We retain our positive view on the gross refining margin (GRM) in 2024E, driven by sustained high crack spreads of middle distillates (TOP’s yield for this product is around 55%).The GRM momentum is expected to continue in 2025E given lower new refining capacity, which will align with the planned commercial commencement of TOP’s Clean Fuel Project (CFP) in the same year.This is expected to foster LT EPS growth at a 23% CAGR during 2024-26E. We maintain an Outperform rating and the 12M FV of Bt62.4.

Thai Oil - 4Q23 and 2023 Earnings in Line; Solid GRM Outlook

<ul><li>Technically, the SET Index is expected to weaken, with the support at 1,430/1,423 points and the resistance at 1,443/1,457 points, after a short-term rebound yesterday within a higher high and higher low pattern.</li><li>This would provide support for another Fed rate hike, which could have a short-term adverse impact on global financial markets.</li><li>In our assessment, the most recent signal from the Fed reinforces the likelihood that the central bank will maintain high interest rates for an extended duration until inflation is brought back to the target of 2%.</li></ul>

Technically, the SET Index is expected to weaken, with the support at 1,430/1,423 points and the resistance at 1,443/1,457 points, after a short-term rebound yesterday within a higher high and higher low pattern.This would provide support for another Fed rate hike, which could have a short-term adverse impact on global financial markets.In our assessment, the most recent signal from the Fed reinforces the likelihood that the central bank will maintain high interest rates for an extended duration until inflation is brought back to the target of 2%.

May Not See Good News From US PPI and FOMC Minutes

<ul><li>We re-initiate TOP with a Buy rating.</li><li>Our valuation metrics suggest that the share price is now undervalued, while the long-term earnings growth is strong, with expected three-year EPS growth at a 12% CAGR thanks to the higher new normal of the gross refining margin and the full-year contribution from the clean fuel project (CFP) in 2025E.</li><li>The oil spill incident at SBM-2 (connecting to floating hoses) is not expected to be as severe as the incident at SPRC, where the damage occurred to subsea equipment; the restoration of normal operations is thus likely to happen more swiftly than in the case of SPRC.</li></ul>

We re-initiate TOP with a Buy rating.Our valuation metrics suggest that the share price is now undervalued, while the long-term earnings growth is strong, with expected three-year EPS growth at a 12% CAGR thanks to the higher new normal of the gross refining margin and the full-year contribution from the clean fuel project (CFP) in 2025E.The oil spill incident at SBM-2 (connecting to floating hoses) is not expected to be as severe as the incident at SPRC, where the damage occurred to subsea equipment; the restoration of normal operations is thus likely to happen more swiftly than in the case of SPRC.

Thai Oil: Strong Earnings Outlook; CFP to Boost New Normal Earnings Base

<ul><li>The SET Index is expected to move sideways up, with the resistance at 1,585/1,600 points and the support at 1,570/1,560 points.</li><li>Meanwhile, the banking problems in the US and Europe have eased to some extent.</li><li>Regarding the FOMC meeting tonight, we share the market's view calling for the Fed to raise the fed funds rate by 0.25% to 4.75-5.00% and give more weight to the stability of the financial system than inflation.</li></ul>

The SET Index is expected to move sideways up, with the resistance at 1,585/1,600 points and the support at 1,570/1,560 points.Meanwhile, the banking problems in the US and Europe have eased to some extent.Regarding the FOMC meeting tonight, we share the market's view calling for the Fed to raise the fed funds rate by 0.25% to 4.75-5.00% and give more weight to the stability of the financial system than inflation.

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

<ul>
<li>We maintain the BUY call with a new target price of Bt64.0(from Bt71.0), incorporating the capital increase completed in 3Q22.TOP’s 3Q22 net profit declined to Bt12.0m (-99% YoY, -100% QoQ)</li>
<li>Weak GRM and stock loss dragged 3Q22 profit The 3Q22 net profit plunged to Bt12.0m,compared to Bt2.0bn in 3Q21 and Bt25.3bn in 2Q22.The result came our lower than our expectation.</li>
<li>Excluding the extra items (stock loss of Bt9.2bn), the operating profit stood at Bt5.5bn (+343%YoY, -75%QoQ).The YoY growth was underpinned by a 60% surge in GIM following improved refinery margin</li>
</ul>


We maintain the BUY call with a new target price of Bt64.0(from Bt71.0), incorporating the capital increase completed in 3Q22.TOP’s 3Q22 net profit declined to Bt12.0m (-99% YoY, -100% QoQ)
Weak GRM and stock loss dragged 3Q22 profit The 3Q22 net profit plunged to Bt12.0m,compared to Bt2.0bn in 3Q21 and Bt25.3bn in 2Q22.The result came our lower than our expectation.
Excluding the extra items (stock loss of Bt9.2bn), the operating profit stood at Bt5.5bn (+343%YoY, -75%QoQ).The YoY growth was underpinned by a 60% surge in GIM following improved refinery margin


TOP : 3Q22 Earnings Hit by Weak GRM and Stock Loss

Thailand

Thai Oil is Thailand's largest integrated petroleum refining and petrochemical company, operating one of Asia's most complex single-site refineries with a crude distillation capacity of 275,000 barrels per day. The company produces a wide range of refined petroleum products, petrochemicals, and lube base oil, alongside engaging in power generation and other supporting businesses. Thai Oil was founded in 1961 and is headquartered in Bangkok, Thailand.

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Thai Oil (TOP TB)

Thai Oil - 4Q23 and 2023 Earnings in Line; Solid GRM Outlook

We retain our positive view on the gross refining margin (GRM) in 2024E, driven by sustained high crack spreads of middle distillates (TOP’s yield...

Krungthai XSpring

May Not See Good News From US PPI and FOMC Minutes

Technically, the SET Index is expected to weaken, with the support at 1,430/1,423 points and the resistance at 1,443/1,457 points, after a...

Krungthai XSpring

Thai Oil: Strong Earnings Outlook; CFP to Boost New Normal Earnings Base

We re-initiate TOP with a Buy rating. Our valuation metrics suggest that the share price is now undervalued, while the long-term earnings growth...

Krungthai XSpring

Today's Dominant Ideas

The SET Index is expected to move sideways up, with the resistance at 1,585/1,600 points and the support at 1,570/1,560 points. Meanwhile, the...

Krungthai XSpring

TOP : 3Q22 Earnings Hit by Weak GRM and Stock Loss

We maintain the BUY call with a new target price of Bt64.0 (from Bt71.0), incorporating the capital increase completed in 3Q22. TOP’s 3Q22 net...

Pi Securities PCL, Thailand

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