Krungsri Securities analysts commented on PTT Public Company Limited (SET: PTT)’s recent Board of Directors’ resolution, passed on July 17, to approve a stake adjustment in Lotus Pharmaceutical (Lotus).
Under the proposal, no more than 2% of the company’s total issued and outstanding shares will be sold via the Taiwan Stock Exchange. After the sale, Innobic (Asia) Company Limited (INBA), a PTT subsidiary, will remain the major shareholder with a stake not less than 36%, resulting in Lotus being reclassified from a subsidiary to an associate company.
Krungsri holds a slightly positive outlook on this adjustment, attributing it to potential positive sentiment from a pre-tax non-cash gain of approximately THB 6.2–7.6 billion from the fair value adjustment of the Lotus investment (referenced from Lotus’s trading price from July 17, 2025, to the present).
This gain is expected to be reported in 3Q25 and would provide a 6–8% upside to PTT’s 2025 net profit. There is also an anticipated cash gain of THB 250–585 million from the share sale (depending on the final average selling price). This would translate to an additional 0.20–0.60% upside in this year’s profit.
Importantly, PTT does not lose control over the Lotus business, nor will there be a material reduction in Lotus’s annual profit contribution, which stands at approximately THB 1.8 billion.
Nonetheless, the outlook for PTT’s normalized profit in 2Q25 remains subdued compared to 2Q24 and 1Q25. The company was dragged down by significant stock losses at subsidiaries, notably in the P&R segment, which offset the recovery in the gas business that came from improved GSP margins (as gas costs declined).
Thus, Krungsri maintains its “Neutral” recommendation on PTT, with a target price of THB 32.50 per share, viewing it as a hold for dividend yield—estimated at around 6%—while awaiting clarity on long-term gas price structure regulation changes (which could affect PTT’s gas business). Near-term catalysts remain limited, and 2025–2026 normalized profit is expected to be flat or increase by only about 2%.
Pattaralada Sa-ngasang, Chief Financial Officer of PTT, added previously that the Board’s decision allows for the sale of up to 2% of Lotus’s shares through the Taiwan Stock Exchange by July 2026. After this divestment, Innobic (Asia) will retain its status as the major shareholder with at least 36% ownership and remains confident in Lotus’s future growth.
The strategic adjustment in the Life Science business reflects PTT’s intent to synchronize its operations with market realities and competition, aiming for a self-funding growth model in the pharmaceutical segment. This approach is intended to ensure long-term benefits for both PTT and the national interest. The stake adjustment will provide greater flexibility for future growth in its Life Science business.
