IVL Jumps 4% amid Strong Earnings Potential to Push Target Price to THB70

The share price of Indorama Ventures Public Company Limited (SET: IVL) closed the morning session on June 6, 2022, at THB51.25 per share, increased THB2 or 4.06% per share with a trading value of THB1,150 million.

IVL has been surging more than 10% this quarter and 18% this year amid strong earnings potential in 2022.


FSS International Investment Advisory (FSSIA) stated that it sees upsides to its net profit forecasts in 2022-24, driven by three factors. First, FSSIA anticipates higher margins for longer for integrated PET-PTA, MTBE, and particularly surfactants, which have commanded high margins due to the tight supply and strong demand. Second, FSSIA estimates the EBITDA upside from integrated oxides and derivatives (IOD) to be larger than its previous expectation due to the strong margins of PO, surfactants, and ethanolamine, which should more than offset the margin weakness of MEG and the weak demand for MEG and fibres (lifestyle) due to China’s lockdowns. Third, the downside from the energy price hikes should be more than offset by the higher product margins.

FSSIA projects an additional gas cost of USD25m for production in North America on the higher Henry Hub gas price, and €35m for production in the EU.


With additional drivers in the form of margin upsides for PET-PTA, MTBE, and surfactants, a 10% q-q projected higher volume to 3.9mt, and higher IOD EBITDA, mainly from Oxiteno (+USD50 million a quarter based on the estimate), FSSIA projects a 2Q22 net profit in the range of THB10-14 billion, giving a “BUY” recommendation with a target price at THB70 per share.