CLSA has upgraded its recommendation on PTT Global Chemical Public Company Limited (SET: PTTGC) from “Hold” to “Outperform,” citing the company’s strong positioning amid ongoing global supply disruptions in the petrochemical sector. CLSA has also raised its target price from Bt26 to Bt43, following an earnings estimate revision for 2026-2028 to reflect more favorable market dynamics.
Despite global tightening of feedstock supply due to conflict in the Middle East, PTTGC has secured sufficient crude oil and condensate to operate its refinery, aromatics, and cracker plants at full capacity through mid-June. The company’s diversified sourcing—10% Middle Eastern and 90% non-Middle Eastern crude oil, supplemented with domestic and regional condensate—has shielded it from significant supply issues.
PTTGC’s operational stability stands out while the global sector grapples with a surge in polyethylene (PE) and polypropylene (PP) prices, as a result of feedstock shortage and damaged facilities. CLSA notes that roughly 15 million tons of ethylene capacity, equivalent to 5% of global production, is currently offline, with repairs projected to take two to three years.
The company is running its refinery and downstream operations, including crackers and downstream units, at near-to maximum output, positioning it to benefit from the elevated price environment and strong product spreads. Even should hostilities subside, CLSA expects ongoing supply tightness to support higher petrochemical prices.
Reflecting these advantages, CLSA has raised its earnings projections for PTTGC over FY2026-FY2028 to Bt19.4 billion, Bt21.8 billion, and Bt23.1 billion, respectively, up from previous estimates of Bt498 million, Bt4.3 billion, and Bt6 billion. The new target price of Bt43 is pegged to a 0.64x 2026 price-to-book value, a slight discount to its 10-year average.
