On Wednesday, the share price of The Siam Cement Public Company Limited (SET: SCC) closed the morning session at THB 259.00 per share, a drop of 2.26% or THB 6.00 with a trading value of THB 860.31 million.
Kasikorn Securities (KS) stated that according to the report from Commoplast, the Long Son Petrochemicals (LSP) project in Vietnam had encountered issues relating to equipment during the test for the increase in production capacity. The circumstances caused the project to declare a force majeure, while the maintenance was expected to take around three months.
KS viewed the situation as neutral, even though the issue would delay the commercial operation date (COD) of the project to be around 2H24, which was later than the schedule. However, the circumstances would allow the company to delay the record of depreciation costs and accrued interest, which were worth more than THB 700 million per month.
As a result, this unfortunate event would lower the chance for SCC to recognize the expenses during a lower spread situation, giving the company more upside to KS’ profit forecast.
Kasikorn Securities maintained a “Hold” recommendation for SCC with a target price of THB 278 per share.
