Company Overview
Star Petroleum Refining PCL (SPRC) is positioned as one of the leading refineries in the Asia Pacific region. The company operates a complex refinery in Rayong, capable of producing 175,000 barrels per day – which accounts for 13.2% of Thailand’s total refining capacity. Its high Nelson complexity index of 6.3 reinforces its capability to efficiently process a wide range of crude types, highlighting its attractive operational characteristics in a competitive energy market.
With a Bloomberg ticker symbol SPRC TB, the firm is listed under the Energy sector and has a market capitalization of Bt25,798.6 million (approximately US\$739.6 million) and 4,335.9 million shares issued. The stock’s 52-week high and low are Bt9.40 and Bt7.00, respectively, and its price performance reflects a decline over recent periods.
Stock Data & Financial Snapshot
Star Petroleum Refining currently trades at Bt5.35 with a target price set at Bt9.00, suggesting an attractive upside of +68.2%. The recommendation remains a maintained BUY based on the current valuation and improving operational performance. Key data includes:
- GICS Sector: Energy
- Marketplace Volume (3-month average daily: US\$4.5 million
- Major Shareholders: Chevron South Asia Holdings holds 60.6%, with Thai NVDR holding 4.6%
- FY24 NAV/Share: Bt9.57
- FY24 Net Debt/Share: Bt2.32
4Q24 Performance – Turning the Tide
In the fourth quarter of 2024, SPRC delivered notable results that reversed previous losses. The net profit for 4Q24 was reported at Bt162 million – a significant turnaround from a loss of Bt2.2 billion in 3Q24 and Bt4.4 billion in 4Q23. Excluding one-off items, the core profit for the quarter reached Bt217 million – improving on a Bt196 gain in 3Q24 and a Bt422 million loss in 4Q23.
Behind this reversal, the company managed an inventory gain/(loss) of Bt290 million (partly offset by a forex gain of Bt235 million) and recorded strong operating numbers that aligned with market expectations. Market gross refinery margins (GRM) increased to US\$6.00 per barrel in 4Q24 from US\$4.20 per barrel in 3Q24, driven by a higher jet and diesel spread. Although the run rate dropped marginally to 91% due to scheduled diesel hydrotreater unit maintenance, overall performance showed resilience.
Key Financials at a Glance
Looking at the broader financial picture, Star Petroleum Refining reported an increase in core profit for FY24 by 67% year-over-year, reaching Bt2.2 billion. The trend in operating metrics is positive with improvements expected in 2025. Highlighted financial benchmarks include:
- Net Turnover: Bt265,497 million in 2023 and Bt270,606 million in 2024, with projected growth to Bt300,853 million in 2025.
- EBITDA: Grew from Bt2,873 million in 2023 to Bt6,832 million in 2024, forecasted to reach Bt8,404 million in 2025.
- Operating Profit: A turnaround from a loss of Bt1,067 million in 2023 to a profit of Bt1,474 million in 2024, with further improvement expected.
- Net Profit: Shifted from a loss of Bt937 million in 2023 to a profit of Bt2,235 million in 2024, with estimates showing a rise to Bt3,664 million in 2025 and gradual improvement thereafter.
- EPS: Increased from a loss of Bt0.22 in 2023 to Bt0.52 in 2024, with forecasts of growth to Bt0.8 in 2025.
- Valuation Multiples: PE stands at 18.0x in 2023, expected to contract to 10.6x in 2024 and further to 6.4x in 2025. The P/B ratio is maintained at 0.6x in 2023 and 2024, with a slight decline projected thereafter.
Operating Performance & Dividend Highlights
Operationally, STAR Petroleum Refining’s performance has shown steady progress with a rebound in the gross refinery margin and an improved crude run dynamic – reported at 89% in 4Q24, compared to 86% in 4Q23 and 90% in 3Q24. The improvement in GRM is significant as each US\$1.00 per barrel increase in the GRM assumption forecasts an additional Bt2.0 billion increase in 2024 core net profit.
Moreover, the company announced an impressive dividend payment of Bt0.25 per share for 2H24, which translates to a dividend yield of 4.6%. This strong dividend performance further validates the company’s improving cash flow and profit fundamentals.
Valuation & Analyst Recommendation
The analyst maintains a BUY recommendation on Star Petroleum Refining, emphasizing that its current share price appears undervalued – having already corrected by 18% year-to-date. With the target price set at Bt9.00 and the valuation based on a 1.0x 2025F P/B ratio, there is significant upside potential. Expectations for an earnings recovery in 2025, led by robust diesel demand during the upcoming winter season and the full-year benefit from resumed SPM operations starting in July 2024, underscore the rationale behind this recommendation.
Detailed Profit & Loss, Balance Sheet, and Cash Flow Analysis
The comprehensive financial breakdown includes detailed tables on profit and loss, balance sheet,
