Krungsri Securities maintained its bullish outlook on Thailand’s energy and petrochemical sector, despite warning that preliminary U.S. midterm election results could pressure energy prices in the near term. The brokerage retained TOP, PTTGC and SCC as its preferred stocks, viewing sharp declines in downstream shares as potential buying opportunities.
In its November 5, 2026 research note, Krungsri highlighted 2027 target prices of THB83 for TOP, THB59 for PTTGC and THB315 for SCC, with Buy recommendations on all three.
The investment case rests on supply constraints and improvements in production competitiveness rather than sustained wartime energy prices. Krungsri expects limited refinery capacity additions during 2026–2030 to support refining margins above their 10-year average, while refinery price-to-book valuations remain below pre-pandemic levels.
For petrochemicals, global production restructuring and postponed start-ups of new plants are expected to gradually reduce excess supply, supporting an industry recovery.
According to the report’s preliminary assessment, Democrats were on course to hold more seats in both chambers of Congress. Krungsri said this could make additional U.S. war funding harder to secure, encouraging market expectations for ceasefire negotiations and the reopening of the Strait of Hormuz.
The report noted that oil prices fell around 8–9% on the previous day as investors anticipated easing conflict and additional energy supply. However, Krungsri’s forecasts already incorporate a reopening of Hormuz by the end of 2026 and a subsequent correction in energy prices.
Its most likely near-term scenario involves limited U.S. attacks alongside pressure for negotiations, with the Hormuz blockade continuing. Under that scenario, supply would remain constrained and crude prices could trade at $90–100 a barrel. Krungsri considers those conditions more supportive of refiners and petrochemical producers than upstream businesses.
If the strait reopens, refining margins could decline more slowly than crude prices because global diesel inventories remain low, although refiners would face inventory losses. Petrochemical spreads would also normalize, with naphtha-based producers gaining competitiveness relative to gas-based producers.
Krungsri highlighted several company-specific developments underpinning its selections:
- TOP: Its CFP project is expected to begin commercial operations in the second half of 2028.
- PTTGC: Increased ethane intake in 2029 and greater production optimization following its joint venture with SCC should strengthen competitiveness.
- SCC: An ethane project scheduled to start commercial operations in the second quarter of 2027 is expected to improve LSP’s competitiveness, while a production restart would support growth.
The brokerage said a gradual normalization of energy markets would not overturn its longer-term downstream outlook, leaving substantial share-price weakness as an opportunity to accumulate selected refiners and petrochemical stocks.
