On Monday at 11:55 AM (Bangkok time), Bangchak Corporation Public Company Limited (SET: BCP) gained 2.94% or THB 1.25 to THB 43.75, with a trading value of THB 340.28 million.
Maybank Securities (Thailand) has reiterated its ‘Buy’ recommendation on BCP and raised the target price to THB 61.00 per share from the previous THB 54.00. This upgrade follows an upward revision of the company’s earnings per share estimates by 22-50% for 2026–2029. This is attributed to stronger gross refining margins (GRM), driven by a limited increase in new refining capacity entering the market.
The brokerage has also increased its earnings estimates for BCP’s sustainable aviation fuel (SAF) business, reflecting higher utilisation rates and margin spreads. Meanwhile, the decline in oil prices is not seen to have a material impact, as profits from the exploration and production (E&P) segment are projected to contribute only about 3–6% of the company’s total profits in 2026–2028, despite a seemingly high EBITDA contribution.
Since April, BCP’s share price has risen only 7%, compared to approximately 30% gains for other refinery stocks such as Thai Oil and SPRC, indicating that BCP remains a laggard within the sector. The current valuation is considered attractive, trading at a price-to-book value ratio of 0.6x and a price-to-earnings ratio of 6x based on 2027 data. Maybank expects the company’s strong earnings in 2Q26–3Q26 and the potential revival of a share buyback program to act as short-term catalysts.
On refining margins, Maybank has raised its 2026 Singapore GRM forecast to $12 per barrel from $6, and to $7 / $6 / $6 per barrel for 2027–2029 from $5.5 previously. Refineries continue to be the preferred sub-sector within energy, as global supply remains tight with new refinery capacity averaging just 0.5 million barrels per day for 2026–2028, compared to 1 million barrels per day over the previous three years. Combined with low inventory levels and a delayed increase in global refinery utilisation rates, this should help sustain high GRMs in the near future.
For the SAF segment, Maybank now projects annual EBITDA of THB 3.9 billion due to improved margin spreads and utilisation. Alongside the recently acquired Hong Kong retail oil business, the new channel is expected to generate a combined EBITDA of over THB 5 billion annually, beginning in 3Q26. Notably, the brokerage sees the market as underestimating the earnings growth from the new businesses.
Lastly, the potential impact of lower oil prices has already been factored into Maybank’s forecasts and is not considered a significant downside risk. Although the E&P business accounts for roughly one-third of total EBITDA, its profit contribution is only around 3–6% for 2026–2028 due to high petroleum tax rates and Bangchak’s 45% stake in this unit.
