Thai Oil Public Company Limited (SET: TOP) is projected by CLSA to achieve a 4Q25 net profit of Bt2.2 billion (Bt0.98 EPS), marking a 2% increase quarter-on-quarter, despite a 21% decline year-on-year. CLSA highlights the main drivers as a significant improvement in market GRM, expected to rise to US$9.2 per barrel in 4Q25 from US$3.5 in 3Q25, supported by strong crack spreads and a refinery run rate of 113%.
However, the positive factors are offset by a Bt3.0 billion stock loss due to a drop in Dubai crude prices, as well as quarter-on-quarter hedging and FX losses. These issues have prompted CLSA to revise down its estimated 2025 profit by 13%. Additionally, spreads from aromatics and lube-based products are forecast to lift total GIM to US$11.7 per barrel from US$5.2 in the prior quarter.
Looking ahead to 1Q26, CLSA anticipates GRM softening to US$8 per barrel as crack spreads for jet fuel, diesel, and gasoline decline. The refinery run rate is expected to remain robust, but further profit erosion is a risk if oil prices continue to fall.
On the funding side, Thai Oil is progressing with the issuance of US$600 million in perpetual bonds at a rate of 3.8%, expected to be completed in February 2026. Proceeds will finance the Clean Fuel Project (CFP) amid other bond buybacks and asset monetisation. CLSA maintains a HOLD rating and a target price of Bt36.00, citing short-term support from favourable refining margins but warning of risks related to strategic partner dilution and potential CFP delays.
In the meantime, CGSI has upgraded its outlook for Thai Oil, lifting its target price to Bt45 from Bt38, while maintaining a Hold recommendation. The revision follows assumptions of higher spreads for PX-ULG95 and benzene-ULG95, as well as lower interest costs, which have prompted an 11.3-14.3% increase in forecast core EPS for FY26-27. The target price increase is based on a higher EBITDA forecast, alongside an 8.2x EV/EBITDA 2027F valuation, slightly above Asian peers.
CGSI adds that Thai Oil’s US$600 million perpetual bond issuance in January 2026, exceeding previous estimates, and continued asset monetisation will likely reduce net debt to EBITDA to 4.6x in 2026F. This is comfortably below the 6.0x threshold required to maintain investment grade status for its debt securities.
The firm also notes a potential share price catalyst from the anticipated finalization of PTT’s Genesis project, which aims to bring in a new strategic partner for Thai Oil that should be finalizing soon. CGSI remains skeptical that there will be meaningful operation synergies to offset EPS dilution for the existing shareholders. The firm thinks there should be some positive share price sentiment if the price of newly-issued shares is above the current market price.
