Kiatnakin Phatra Securities (KKPS) has given a ‘Buy’ recommendation and upgraded the target price for Bangchak Corporation Public Company Limited (SET: BCP) by 56%—raising it from THB 44.60 to THB 69.70 per share. The revision is anchored in a robust earnings forecast for 2026 and 2027, while the firm’s sum-of-the-parts valuation approach remains consistent.
A key driver behind this upgrade is Bangchak’s refinery unit, whose enterprise value now stands at THB 98 billion—up 58%—reflecting an improved average gross refining margin estimate of $8.8/bbl for the 2026-2031 period, versus the earlier assumed $6/bbl. The oil marketing segment saw a 13% EV boost to THB 56 billion, underpinned by higher marketing assumptions and benefits from the recent acquisition of Chevron’s Hong Kong oil marketing assets.
OKEA’s EV has also been heightened to THB 15 billion, supported by upgraded petroleum price expectations, increasing the average from $62/boe to $68/boe. These improvements culminate in a compelling 39% implied total return for BCP, inclusive of a notable 10% prospective dividend yield anticipated in 2026.
The earnings outlook has likewise been revised substantially. Kiatnakin now forecasts 2026 net profit at THB 27.4 billion, up from the previous THB 5.6 billion. This reflects a surge in projected GRM to $14.3/bbl and a significant jump in OKEA’s petroleum price projection to $83/bbl. Additionally, OKEA’s production volume estimate was lifted by 9% to 30,539 bbl/d. BCP’s financial performance in 1H26 demonstrated this momentum, with a diesel crack rally driving GRM to $18.5/bbl and a reported net profit of THB 18.4 billion.
For 2027, the net profit estimate was also adjusted upwards to THB 14 billion—bolstered by a GRM increase to $9.6/bbl and a rise in sustainable aviation fuel spread to THB 1.8 billion.
Furthermore, Singapore GRM projections have been raised across 2026 and 2027 to $19.6/bbl and $9.6/bbl, respectively, in response to persistent global refining supply constraints, fueled by limited new capacity, geopolitical tensions, and recovering demand. The diesel crack spread is expected to remain high through 2026, with only a gradual normalization anticipated from 2027 onwards.
