Analysts started to turn positive on Tipco Asphalt Public Company Limited (SET: TASCO) after the US lifted sanction measures on oil businesses operated in Venezuela.
The share price of TASCO rose more than 6% on Friday after the company announced that US authority granted reoperations of businesses in Venezuela. In a letter filed to the Thai stock exchange, TASCO stated that in pursuant to the General License No. 44 dated 18 October 2023 issued by the OFAC under the Department of the Treasury of the United States of America, the license has authorized transactions related to oil or gas sector operations in Venezuela including production, lifting, sale, exportation and payment of invoice for goods and services.
The letter came two years after the US State Department in September 2020 requested businesses in Venezuela to wind down, including TASCO’s crude oil procurement in the country, in which TASCO complied with the request that impacted half of TASCO’s asphalt supply.
However, the bearish sentiment in the market on Friday erased gains by TASCO to only 2.41% at the closing, while the main bourse fell 1.66%. The share price rose slightly by 0.56% to trade at THB17.10 per share on Tuesday.
Tisco Securities (Tisco) upgraded the recommendation of TASCO to “BUY” from “HOLD,” expecting sales and earnings to rise significantly from the easing sanction measures by the US government.
Tisco believed that the resumption of crude purchase from PdVSA will boost TASCO’s profitability in 2024, citing that crude from Venezuela normally gives the highest asphalt yield and the company would maximize the crude purchase from PdVSA during the six-month period, building its inventory, and in turn raising sales volume and earnings.
Tisco gave a target price for TASCO at THB25.00 per share, representing more than 40% upside from the current trading price.
