TOP Edges Higher after Booking THB12 Billion of Net Profit in 2021

The share price of Thai Oil Public Company Limited (SET: TOP) climbed to THB54.75 per share with a 3.79% gain in an early session on Thursday after the company reported an outstanding performance in 2021, booking a net profit of THB 12,578 million from a disappointing net loss of THB 3,301 million in 2020.

TOP had sales revenue of Baht 335,827 million, higher by Baht 92,987 million mainly due to higher product prices, while having a slightly lower integrated intake. Furthermore, spreads of gasoline over Dubai, lube base oil over fuel oil and BZ over ULG95, including LAB gross margin improved sharply during the period. Thus, GIM excluding stock gain / (loss) rose by 3.1 US$/bbl, totaling to 5.5 US$/bbl in 2021. Besides, stock gain of Baht 15,063 million was recognized during the period following a hike in crude oil price whereas stock loss of Baht 7,399 million was booked in 2020.


KTBST Securities (KTBST) revised TOP’s net profit forecast in 2022 by 27% to THB13.4 billion, reflecting 1) faster-than-expected recovery of marketing GRM, 2) higher stock gain from rising Dubai crude price and 3) lower financial cost. The share price outperformed SET Index by 5% in the past six months, in line with the recovering crack spread. The closing price on Tuesday reflected an attractive valuation of PBV2022 at 0.83x (-1.25SD of historic 5-year).

KTBST expected TOP to benefit from rising crack spreads in 1H22, but might face a stock loss in 2H22, following a decline in crude oil to meet higher demand. The securities company believed that the recent movement in share prices had priced in concerns on capital increase.