Precious Shipping Public Company Limited

The resurgence of tensions in the Middle East has led to an increase in the average Dubai crude oil price last week by 4.42 US dollars per barrel, or 5%, to 93.03 US dollars per barrel. Meanwhile, the Singapore refining margin fell by 2.84 US dollars per barrel to 17.31 US dollars per barrel, due to increased regional supply and high US oil inventories. Analysts believe that the strong earnings of refinery groups have already been reflected in their stock prices and recommend switching investments to the petrochemical sector, especially IVL and PTTGC, whose share prices have risen more slowly. Most petrochemical spreads have improved, such as the Ethylene-Naphtha Spread, which increased by 93 US dollars to 242 US dollars per ton. Additionally, the blockade of shipping routes in the Red Sea could support short-term freight rates, with the World Container Index rising 4% to 4,526 points, a positive factor for RCL shares. Meanwhile, the BDI index fell 5% to 2,820 points, but Supramax vessels, which are related to PSL and TTA, increased 2% to 1,634 points. The NEX coal price index also rose 3% to 131.81 US dollars per ton, driven by strong demand in Asia-Pacific.

Precious Shipping, or PSL, sees a bright outlook for the shipping business in the second half of 2026, supported by limited new vessel supply entering the market, which helps maintain supply-demand balance and is positive for freight rates. Managing Director Khalid Moinuddin Hashim revealed that forward freight rates for Supramax vessels remain strong, with August at around 18,500 US dollars per day and September trending higher near 20,000 dollars per day, while the fourth quarter stands at approximately 19,000 dollars per day. PSL's strength lies in its index-linked time charter strategy, which has locked in forward revenue of about 193 million US dollars, reducing volatility. The company also plans to expand its Ultramax fleet and is eyeing second-hand vessel acquisitions to bolster its portfolio.

PSL shares jumped more than 8% after the company reported a second-quarter 2026 net profit of 521.49 million baht, swinging from a net loss of 43.31 million baht in the same period last year. The turnaround was driven by a 58% rise in net freight revenue, supported by a stronger dry bulk shipping market and a larger fleet. Kasikorn Securities noted that PSL's core profit for the quarter came in at 497 million baht, beating its estimate by 79%, buoyed by robust time charter rates of 16,442 US dollars per day, up 62% year-on-year and 31% quarter-on-quarter. The broker raised its 2026 to 2028 earnings forecasts by 60%, 34%, and 27% respectively, and lifted its target price to 10 baht per share, citing expectations that freight rates will remain elevated on strong demand and constrained supply from slower vessel speeds.

Precious Shipping Public Company Limited, or PSL, reported a normalised profit for the second quarter of 2026 of 497 million baht, a 24-fold increase from a year earlier and a fivefold increase from the previous quarter. The result was 79 percent above Kasikorn Securities' forecast. The main driver was time charter equivalent rates that came in 19 percent above expectations at 16,442 US dollars per day, even though operating expenses were 12 percent higher than forecast. The strong freight rates were supported by rising demand from Middle East conflicts, which spurred strategic inventory building for key dry bulk commodities such as grains, iron ore, and coal. Higher bunker fuel prices also led to slower sailing speeds and reduced supply. Kasikorn Securities expects profit in the third and fourth quarters of 2026 to remain close to the second-quarter level. The broker raised its profit forecasts for 2026 through 2028 by 60 percent, 34 percent, and 27 percent respectively, while maintaining a buy recommendation and lifting the target price to 10.00 baht from 9.00 baht, based on a trailing price-to-book value of 0.90 times.

Bulk carrier freight rates in the second quarter of 2026 continued to recover from the first quarter of 2026, averaging 34,100 US dollars per day for Capesize vessels, 18,300 dollars per day for Panamax, 15,800 dollars per day for Supramax, and 13,900 dollars per day for Handysize, according to Nattapon Khamthakhruea, Director of Securities Analysis at Yuanta Securities Thailand. For the third quarter of 2026, which is the high season for the shipping business, freight rates are expected to remain at high levels or edge slightly higher, with Capesize likely to move in a range of 30,000 to 38,000 US dollars per day, Panamax at 17,000 to 21,000 dollars per day, Supramax at 15,000 to 18,000 dollars per day, and Handysize at 13,000 to 15,000 dollars per day. Meanwhile, Kasikorn Securities stated in its analysis that PSL is expected to report a normal profit of 291 million baht for the second quarter of 2026, swinging from a loss compared to the same period last year, supported by strong demand for iron ore and grain shipping. RCL is expected to report a normal profit of 2.1 billion baht, up 5 percent from the same period last year and up 33 percent from the previous quarter. Kasikorn Securities has upgraded its recommendations for both PSL and RCL to Buy, raising the target price for PSL to 9 baht from 6.8 baht, and for RCL to 40 baht from 33.0 baht.

CGS International Securities Thailand forecasts that net profits of Thai listed companies in the second quarter of 2026, covering 127 firms or 86.7 percent of market capitalization, will total 276 billion baht, a decline of 10.5 percent from the same period last year and down 5.3 percent from the previous quarter. The main drag came from the energy sector due to weaker refining margins, and the transport sector which was hit by the low season for airlines. Meanwhile, petrochemicals, electronics, ICT, and tourism were key supports for the market. Energy sector profits are expected to fall 26.6 percent year-on-year and 11.3 percent quarter-on-quarter. Transport sector profits are seen dropping 72.1 percent year-on-year and 74.5 percent quarter-on-quarter, weighed by weaker results at AAV and THAI. Petrochemical profits are forecast to surge 326.4 percent from a low base last year, led by IVL and PTTGC. Electronics profits are expected to grow 89 percent, and ICT profits to rise 26 percent, helped by easing competition and improved ARPU at ADVANC and TRUE. Tourism benefited from the European travel season for MINT. Stocks expected to show outstanding profit growth both year-on-year and quarter-on-quarter include IVL, PSL, and BGRIM. Stocks with accelerating profit momentum from the previous quarter include MINT, SC, and 3BBIF. The stocks forecast to grow the most year-on-year are BGRIM, up 7,305.8 percent, IVL up 982.9 percent, PSL up 771.9 percent, SPRC up 666.8 percent, and AMATA up 599.1 percent, mostly driven by low profit bases last year and industry recovery. In terms of quarter-on-quarter momentum, the stocks expected to see the biggest profit increases are MINT, up 452 percent, SC up 441.7 percent, IVL up 263.3 percent, PSL up 169 percent, and PTTEP up 121.2 percent, supported by seasonal factors, a recovery in the hotel business, property transfers, and improved sales volumes and margins in energy and petrochemicals. CGSI has also selected top picks under its Quality and Earnings Momentum strategy, focusing on stocks with profit growth both year-on-year and quarter-on-quarter, Outperform recommendations, and low volatility. These include PTTEP, MINT, SC, BAREIT, TVO, IVL, TNP, ZEN, BANPUU, and PR9.

Analysts have selected seven stocks expected to post second-quarter earnings growth. PSL may swing from a loss to strong profit as dry bulk freight rates surge. RCL benefits from container shortages due to port congestion and can levy additional special fees. AMATA is scheduled for large land transfers in both Thailand and Vietnam, supported by electric vehicle and data center production bases. ERW maintains high average revenue per room and continues expanding its Hop Inn branches. MRDIY's profit keeps racing ahead from new branch openings with quick payback and robust same-store sales. CPN gains from increased mall foot traffic, boosting rental income and sales share. COM7 is generating new revenue from retail media, using over 1,400 stores nationwide as advertising billboards with high gross margins.

Brent crude oil prices soared to $90.38 per barrel, up $2.28 or 2.60%, amid escalating concerns over US-Iran war risks. This pushed PTTEP shares up 1.50 baht or 1.03% to 147 baht, and TOP rose 1.25 baht or 2.02% to 63.25 baht. Meanwhile, petrochemical stocks like PTTGC gained 0.75 baht or 2.03% to 37.75 baht, and SCC added 2 baht or 0.79% to 256 baht. On the other hand, hospital and transport stocks faced selling pressure, with BH falling 3 baht or 1.61% to 183.50 baht, and AOT dropping 0.75 baht or 1.17% to 63.25 baht. DELTA tumbled to 292 baht before recovering to 296 baht, down 4 baht or 1.33%. In contrast, PSL surged 0.50 baht or 6.49% to 8.20 baht, tracking higher freight rate indices.