CLSA has upgraded IRPC Public Company Limited (SET: IRPC) to “Outperform” from “Hold,” citing significant operational recovery amid rising gross refining margins (GRM) and petrochemical spreads. The new target price (TP) is set at Bt2.10, up from Bt1.08, as industry disruptions stemming from ongoing conflict in the Middle East drive robust earnings prospects for IRPC in 2Q26.
IRPC is poised for strong performance in both its refinery and petrochemical divisions as the conflict has damaged regional plants and disrupted the seaborne naphtha trade. The company has already secured 90% of its crude oil requirements for March and April, sourcing 70% from the Middle East—primarily Saudi Arabia (33ppt), UAE (17ppt), and Qatar (9ppt)—and 22% from the United States. Procurement for May continues and is closely monitored.
IRPC’s refinery produces 50% diesel and jet fuel, with spreads climbing to US$31/bbl and US$35/bbl, up from US$24.5/bbl in 4Q25. Although gasoline spreads softened to US$11.3/bbl (US$15.7 in 4Q25), first-quarter GRM is estimated at US$9/bbl compared to US$5.9 in the prior quarter.
Within petrochemicals, spreads of polypropylene (PP), high-density polyethylene (HDPE), and acrylonitrile butadiene styrene (ABS) have risen sharply as well. Weekly spreads for PP and ABS have hit US$461/ton and US$817/ton, respectively. Combined with higher refinery margins, IRPC’s gross integrated margin (GIM) is projected at US$14/bbl for 1Q26—well above the US$8.8/bbl average in 2025.
Buoyed by healthy margins and resilient petrochemical spreads, IRPC is anticipated to fully capture these industry gains in 2Q26, contingent upon continued crude oil availability. CLSA notes that ongoing logistical challenges in the Strait of Hormuz, which accounts for 35% of seaborne naphtha, should keep petrochemical spreads elevated throughout the quarter.
Revised earnings assumptions for 2026 and 2027 drive increases of 175% and 66%, respectively. The company’s financial position is also set to improve significantly, with net debt/EBITDA projected to decline to 3.8x (from 6.6x in 2025) and net debt/equity ratio to drop to 0.4x (from 0.6x).
