PTT enters a new uptrend, supported by its integrated business

Earnings
โดย HoonVision·TH·Read original
Summary · why it matters

Krungsri Securities Public Company Limited stated that PTT has maintained energy security even as geopolitical conflicts increasingly disrupt energy transport, supported by the capability of its trading business to access supply sources worldwide. The company can still procure crude oil and feedstock for downstream operations to continue production, with refinery utilization in its group at 103% in the first half of 2026, compared with a normal level of 104% in the first half of 2025, versus the region where run rates have been cut by 8 to 17 percent, led by Chinese refineries. On the petrochemical side, olefins utilization in the first half of 2026 rose to 86%, compared with 80% in the first half of 2025, allowing the company to benefit from higher margins amid persistently tight supply. PTT maintains its target to keep expanding its trading business over the long term, aiming to diversify crude oil procurement sources to strengthen energy security and to expand trading into more fuel types. It keeps its target to increase LNG trading volume by about three times to 10 million tonnes per annum by 2030, versus 1.75 million tonnes per annum in the first half of 2026 and a 2026 target of 3.7 million tonnes per annum. The company is generating stronger cash flow, supported by nearly all businesses, and is considering increasing shareholder returns. First-half 2026 EBITDA and net profit rose 55% and 75% year on year respectively, supported by tight energy supply from the closure of the Strait of Hormuz. This drove higher margins in the exploration and production business along with crude oil prices, supported the gas business through lower costs from gas price restructuring and higher reference selling prices, and helped the refinery and petrochemical businesses through recovering refining margins and product spreads. These factors are expected to continue supporting year-on-year growth in the second half of 2026, leading to an improving cash flow trend. Net debt to EBITDA is likely to keep declining from 1.26 times in the first half of 2026, compared with 1.75 times in 2025, leaving excess liquidity to pay dividends to shareholders at no less than the industry average. PTT maintains its asset monetization plan and its search for strategic partners to reduce financial costs and strengthen long-term competitiveness. It keeps its target to carry out asset monetization of about 100 billion baht during 2025 to 2027, with 18 billion baht already completed from 2025 through the first half of 2026, to use liquidity to reduce debt and improve the ability to withstand long-term business volatility. It also maintains its plan to seek strategic partners or a Genesis transaction to enhance competitiveness in feedstock procurement and long-term funding sources, with progress now expected to be delayed into 2027 because the war in the Middle East and government intervention have affected negotiations. Krungsri Securities views this as slightly positive for PTT, as management is considering higher shareholder returns based on excess liquidity. This makes the forecast 2026 dividend of about 2.3 baht per share, or a yield of 5.6%, which is close to the 2025 level that included a special dividend, more likely and possibly subject to upside, compared with expected dividend yields of no less than 6 to 7 percent for PTTEP and TOP. The delay in concluding a strategic partner or Genesis transaction during the war is not worse than expected, and the broker maintains its view that it does not reduce the competitiveness of PTT and its subsidiaries, while stronger current business conditions increase bargaining power in negotiations. Krungsri Securities maintains its view that normalized profit in the third quarter of 2026 will grow year on year, still supported by nearly all businesses from upstream to downstream. Gas price restructuring has reduced feed costs for gas separation plants by 17% year on year, while the closure of the Strait of Hormuz has raised reference selling prices. Subsidiary businesses are supported by persistently tight supply, boosting margins at PTTEP, TOP, PTTGC, and IRPC. The broker maintains a Buy recommendation with a 2027 target price of 44.5 baht. It keeps its view that the business is in a recovery phase, with the gas business turning around from gas restructuring and the refinery and petrochemical businesses benefiting from tighter supply as less new capacity comes online and global production restructuring takes place. This is keeping refining margins above the ten-year average and lifting petrochemical spreads back to long-term profitable levels, supporting normalized profit growth at a compound annual growth rate of 18% during 2026 to 2028.

Impact on stocks 5

Energy Transition & Power Demand▲ · 2 stocks
PTT Public Company Limited
PTT
▲ PositiveSupplyrelevance

PTT's integrated business benefits from tight supply and high utilization, with strong earnings growth.

Energy▲ · 2 stocks
IRPC Public Company Limited
IRPC
▲ PositiveSupplyrelevance

Group refinery utilization high and petrochemical margins benefit from tight supply, but IRPC not directly mentioned.

Materials▲ · 1 stocks

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