CLSA expects PTT Global Chemical Public Company Limited (SET: PTTGC) to post a strong turnaround in its second-quarter 2026 results, projecting net profit of Bt10.7 billion (Bt2.38 EPS), up 231% quarter-on-quarter and swinging from a Bt3.6 billion loss a year earlier. The brokerage maintains its Outperform rating with a target price of Bt43.00, implying 16% upside from the current price of Bt37.00.
The turnaround is expected to be driven by refining, aromatics, olefins and polymers. Refining should soften quarter-on-quarter due to a lower run rate but remain strong overall, while the other three business units are set to benefit from higher product prices.
CLSA highlighted that PTTGC’s refining run rate is expected to fall to 96% from 103% in the first quarter of 2026, due to the government’s export ban. Gross refining margin (GRM) should stay relatively flat quarter-on-quarter at US$16.5 per barrel versus US$16.7 in 1Q26, weighed down by a higher crude premium and the government’s ex-refinery price cut in April-May. The company is expected to book a Bt350 million stock loss and a Bt450 million hedging loss.
The aromatics run rate should rise to 90% from 87% in 1Q26, driven by higher condensate residue (CR) prices, up US$120 per tonne quarter-on-quarter. The olefins cracker run rate is expected to increase to 90% from 79%, while the polymer run rate should reach 100%, up from 98%, supported by higher polyethylene (PE) prices. Allnex’s sales volume should stay flat quarter-on-quarter with improved Ebitda on higher selling prices. PTTGC is also expected to book a Bt1.8 billion restructuring expense related to its Polyol asset.
On hedging, PTTGC has 10% of its refined products volume hedged for the second half of 2026, mostly diesel, and 20% of aromatic products. Most of the hedged diesel positions were locked in before the war, at estimated crack spreads of US$60 per barrel for 1Q26 and US$40 per barrel for 2Q26. Diesel crack spreads have since rebounded to US$60 per barrel; if this level holds through the end of the third quarter, it would imply a Bt1 billion hedging loss.
The outlook for the third quarter is mixed. GRM remains strong on healthy cracker spreads for diesel and jet fuel, and aromatics is improving on higher paraxylene (PX) and benzene (BZ) spreads, with CR prices — used to crack diesel — staying high. However, olefins and polymer prices have softened substantially from the second quarter.
CLSA maintains its Outperform rating and Bt43.00 target price, pegged to 0.64x 2026CL price-to-book, a slight discount to 1.0 standard deviation below its 10-year historical average, implying a PE multiple of 10.0x. PTTGC is scheduled to report results on 7 August.
