JPMorgan upgraded PTT to Overweight, citing potential additional cash flexibility from asset restructuring in 2027. The bank also expects strong third-quarter results across Thailand’s energy sector to support upside to second-half dividends per share.
For upstream producer PTTEP, however, JPMorgan projects third-quarter net profit of THB19 billion, down 30% quarter-on-quarter, reflecting a production outage at Malaysia’s Block K and hedging losses. Still, the US investment bank forecasts a 49% sequential earnings rebound in the fourth quarter as volumes recover and oil and gas prices rise.
Thai Oil (TOP) is expected to post THB13 billion in third-quarter net profit, a 61% quarterly increase and its strongest result since the second quarter of 2022. Supporting factors include inventory gains, utilisation of approximately 109% and gross refining margins above $20 per barrel.
TOP shares nevertheless lost 6% over the past month, compared with the SET’s 2% decline. Investors have been concerned about high DAP crude premiums and a possible increase in domestic diesel price cuts to THB5 per litre in the fourth quarter.
JPMorgan had assumed a heavier diesel national-service burden. Its recent channel checks instead point to plentiful domestic supply, leaving scope for the government to maintain or reduce the cuts, particularly if oil prices weaken.
Each THB1-per-litre reduction in that obligation would add approximately $2 per barrel to TOP’s GIM, the bank estimates. It puts October GIM near $10 per barrel, against investor concerns about levels below $5.
For PTT, completion of downstream asset restructuring could also open the possibility of a special dividend in 2027.
