KGI Securities (Thailand) has upgraded its rating on PTT Public Company Limited (SET: PTT) to ‘Outperform’ following the implementation of the new Utility Model for natural gas pricing, which took effect on January 1, 2026.
The National Energy Policy Council (NEPC) introduced the new structure to better reflect actual costs and promote fairness across sectors, replacing the longstanding Single Pool Gas Price model.
Under the Utility Model, natural gas destined for gas separation plants, petrochemicals, and LPG production will be priced based on the Gulf of Thailand gas rate. Meanwhile, gas used for power generation, NGV, and industrial sectors will adopt a Pool Price, representing a weighted average of gas from the Gulf of Thailand, Myanmar, and LNG.
The price for Gulf of Thailand gas supplied to separation plants will be set at a 10% premium over the Gulf rate used in the Pool Price calculation, with separation plants absorbing the difference.
As a result of these changes, KGI has revised its earnings forecasts for PTT, raising projections by 7% to THB 89.6 billion for 2025 and by 2% to THB 98.9 billion for 2026.
The upgrade is attributed to recent estimate revisions for major subsidiaries PTT Exploration and Production (PTTEP) and PTT Global Chemical (PTTGC), an expected extra gain of around THB 8 billion from the partial divestment and reclassification of Taiwan’s Lotus Pharmaceutical in 2025, and an estimated benefit of THB 2.7 billion in 2026 from the new Utility Model compared to the previous pricing system.
Assumptions underpinning these projections include an LNG price of US$10/mmbtu, Myanmar gas at US$9.0/mmbtu, and Gulf of Thailand gas at US$5.4/mmbtu in 2026, with anticipated gas usage for the petrochemical sector and gas separation plants at 564 mmscfd and 1,454 mmscfd, respectively.
KGI maintains a 2026 target price of THB 35.00 per share for PTT. The upgraded rating reflects the positive earnings impact from the Utility Model, attractive dividend yields of 6.6% for 2025–2027, and expectations of a strong fourth quarter in 2025, fueled by gains from the Lotus Pharmaceutical transaction.
