Kiatnakin Phatra Securities (KKPS) maintains a “Buy” rating on PTT Public Company Limited (SET: PTT), despite facing a challenging second quarter in 2025 as restructuring and catalysts are in sight. The firm keeps the price objective at THB 40.00, while PTT shares were last traded at THB 32.25.
PTT’s reported net profit after tax (NPAT) for the second quarter dropped to Bt21.5 billion, down from Bt23.3 billion in the prior quarter. Excluding non-recurring items, core earnings fell from Bt20.9 billion to Bt17.8 billion. For the first half of 2025, net profit stands at 45% of KKPS’s full-year estimate and 48% of consensus forecasts, while core net profit accounts for 39% and 41%, respectively.
PTT’s Exploration and Production (E&P) unit remained a key pillar, contributing the largest share to core NPAT, making up 52% via PTTEP. Other significant contributors were OR and TOP at 7% each. Conversely, subsidiaries PTTGC and IRPC posted losses, detracting 9% and 1% respectively from core results.
In particular, the midstream gas business is facing headwinds. The company’s transmission arm continued to exhibit stable EBITDA, posting Bt7.1 billion for the quarter, nearly unchanged from the prior period. However, Gas Separation Plant (GSP) performance was notably poor; its core EBITDA swung from Bt768 million in Q1 to a loss of Bt221 million in Q2, despite flat feedstock prices and a 5% quarterly increase in sales volumes. The pinch came largely from shrinking EBITDA margins, with polyethylene (PE) prices under pressure, and ethane prices also declining to US$400-420 per ton.
The Supply and Marketing (S&M) segment improved, with EBITDA up by Bt568 million to Bt3.7 billion, buoyed by a drop in gas feedstock costs. Meanwhile, other gas units such as PTT LNG and PTT NGD saw a combined EBITDA dip of 4% quarter-on-quarter, landing at Bt3.1 billion.
Petroleum trading was another soft spot, with EBITDA declining from Bt1.7 billion in Q1 to Bt1.2 billion in Q2, when adjusted for mark-to-market fluctuations in LNG contracts.
KKPS views PTT’s current valuation as attractively discounted relative to its sum-of-the-parts value of Bt40 per share, with a high dividend yield adding to its appeal. The brokerage expects that the announced restructuring plan will start to show benefits in the second half of 2025, primarily by improving efficiencies and unlocking value in PTT’s affiliate network.
Additionally, KKPS expects PTT to report Bt112.3 billion of net profit in 2025 before improving to Bt122.5 billion and Bt126.2 billion in 2026-2027, respectively.
