Kasikorn Securities attributes the recent 10% decline in Star Petroleum Refining Public Company Limited (SET: SPRC) share price to a significant drop in the gasoline crack spread, which fell from $16 to $11. This shift has contributed to a decrease in Singapore GRM (Gross Refining Margin), now at $4 per barrel compared to $14 per barrel the previous week.
Despite these pressures, Kasikorn Securities highlights that SPRC maintains a unique product mix, with diesel accounting for about 40-45% of its output and gasoline at 25%—a higher gasoline ratio than other Thai refiners, whose gasoline proportion usually stands at 18-23%. As a result, expectations are that SPRC’s refining margins will be more directly impacted by the sharp decline in gasoline crack spread.
On a positive note, SPRC has completed its refinery maintenance and has ramped up its utilization rate to around 90%, returning to pre-conflict levels. Kasikorn Securities continues to recommend an “Outperform” rating on SPRC, with a target price of THB 7.70 per share.
