Date of Report
25 October 2024
Broker Name
UOB Kay Hian
Company Overview
PTT Global Chemical (PTTGC) is a fully integrated petrochemical and chemical company based in Thailand. The company’s main products are olefins, specifically ethylene and propylene.
Stock Data
- Share Price: Bt24.90
- Target Price: Bt24.50
- Market Cap: Bt113,848.4 million (US$3,398.1 million)
- Shares Issued: 4,508.8 million
- GICS Sector: Materials
- Bloomberg Ticker: PTTGC TB
- 3-Month Average Daily Turnover: US$18.4 million
- 52-Week High/Low: Bt41.25 / Bt22.80
Price Performance
- 1 Month: -9.8%
- 3 Months: -8.2%
- 6 Months: -34.8%
- 1 Year: -24.1%
- Year to Date (YTD): -34.4%
Major Shareholders
- PTT: 45.2%
- NDVR: 4.8%
- Siam Management Holding: 3.0%
Earnings Overview
Expected Net Loss for Q3 2024
- Anticipated net loss of Bt10.2 billion, a decrease compared to previous quarters due to:
- A Bt9.0 billion impairment loss from Vencorex
- A stock loss of Bt3.6 billion, driven by a US$9.0/bbl decline in crude oil prices from June to September
- Weaker olefins performance, impacted by declining petrochemical spreads
Core Operational Loss
- Core operations are expected to show a loss of Bt1.2 billion, an improvement from the previous quarter due to:
- Stronger performance in the upstream business
- Aromatics spreads rose by 5% quarter-on-quarter
- Market gross refinery margin (GRM) remained steady at US$3.2/bbl
Financial Projections
3Q24 Results Preview
- Revenue: Bt155.5 billion (down 4% year-on-year, down 8% quarter-on-quarter)
- COGS: Bt148.1 billion (down 1% year-on-year, down 6% quarter-on-quarter)
- EBITDA: Bt5.9 billion (down 46% year-on-year, down 35% quarter-on-quarter)
- Core Profit: Expected to be a loss of Bt1.2 billion
- Net Profit: Expected to be a loss of Bt10.2 billion
Future Outlook
- 4Q24 Net Loss: Expected to remain flat quarter-on-quarter with another impairment loss of approximately Bt10 billion from PTT Asahi Chemical (PTTAC).
- Market Conditions: Facing intensified competition and oversupply in the market, leading to a drop in prices for key products such as acrylonitrile and methyl methacrylate.
- Petrochemical Sector: The outlook for petrochemical spreads is negative, with a decline in aromatics and olefins spreads noted.
Analyst Recommendation
- Rating: Maintain HOLD
- Target Price Adjustment: Increased to Bt24.50 for 2025, based on 0.41x 2025F P/B at -2SD.
- Switch Recommendations: Analysts suggest switching to Bangchak Corporation (BCP) and Indorama Ventures (IVL) as leading stocks within the oil & gas sector.
Environmental, Social, and Governance (ESG) Initiatives
- CG Report: 5
- SET ESG Rating: AAA
- Environmental Goals: PTTGC is committed to achieving net-zero greenhouse gas emissions by 2050 through efficient resource use and cooperation with partners.
- Social Contributions: The company focuses on creating value for society and supporting community welfare and education.
- Governance: Emphasis on transparency and innovative, environmentally friendly chemical production.
