PTTGC Shares Rise on Expectations Earnings Bottomed-Out and Will Recover from 1Q23

On Tuesday, shares of PTTGC rose by 3% on expectations that the business’s financial performance has hit bottom and is on track to improve going forward from 1Q23, with earnings of more than THB20 billion now expected this year.

As of 10.20 A.M. (Thai time), the share price of PTT Global Chemical Pcl. (SET: PTTGC) rose THB1.50/share, or 2.97%, to THB52.00/share, with a trading value of THB1,166 million.

PTTGC reported a net loss of THB8,752 million for 2022, a significant downturn from a net profit of THB44,982 million in 2021.

In 2022, the company had total sales revenue of THB678,267 million, which increased by 46% from previous year due to several factors such as the global economic recovery with the economy now re-opened and demand increased.

Overall performance of Upstream Business remained strong, however the spreads weakened for all major petrochemical products, especially in Intermediate and Polymers & Chemicals businesses. The main reasons were the higher production costs, China’s zero-COVID policy’s adverse impacts on the demand, the oversupply situation, and the concerns over a global recession.

Krungsri Securities recommended a “BUY” rating on PTTGC with a target price of THB55.25, as they believe the earnings have bottomed-out and will recover from 1Q23 onwards. Higher petrochemical prices amid China reopening will lend support.

Capital Nomura Securities also stated that PTTGC’s earnings bottomed out last year, and that the share price will gradually improve in the same direction as Thai Oil Pcl’s share price (SET: TOP).

PTTGC’s profit should increase to THB20.5 billion this year due to no major maintenance shutdowns for the entire refinery and olefins plants, as well as no large stock losses. Recommending “BUY” with a target price of THB68.00.