CGS International Securities (Thailand) (CGSI) maintained its Add ratings on PTT (SET: PTT) and Thai Oil (SET: TOP) after their third-quarter 2026 results, retaining target prices of THB45 and THB85, respectively. The brokerage expects both companies to face weaker fourth-quarter earnings but sees easing energy input costs supporting their businesses in early 2027.
Based on share prices cited in its November 12 reports, the targets imply an upside of 17.6% for PTT from THB38.25 and 44.1% for TOP from THB59.
Drivers behind third-quarter earnings
PTT’s underlying performance strengthened even as reported profit declined. Core net profit increased 17.7% quarter-on-quarter to THB62.78 billion, with stronger contributions from refining and trading outweighing weakness in natural gas.
Reported net profit, however, fell 22.8% to THB40.55 billion, matching CGSI’s forecast and Bloomberg consensus estimates. Exploration and production impairment charges weighed on earnings, while derivative gains recorded in the preceding quarter did not recur.
Meanwhile, TOP showed the opposite pattern: inventory gains boosted reported earnings, while core profit softened. Net profit climbed 117% quarter-on-quarter to THB18.01 billion, supported by THB3.85 billion in inventory gains. CGSI noted that reported core net profit of THB18.12 billion, down 15.4%.
TOP’s gross integrated margin narrowed to US 22.8 per barrel from US 23.9. Improved lube-base earnings provided support against a weaker refining contribution.
Gas costs and domestic demand weigh on operations
PTT’s natural gas EBITDA declined 33.1% quarter-on-quarter to THB16.53 billion. Its supply and marketing business was affected by a one-off increase in gas costs following revised production-sharing terms for the Malaysia-Thailand Joint Development Area.
Lower demand added pressure, with gas sales volumes falling 8.9%. Gas separation operations also weakened as maintenance at GSP No. 6 reduced utilisation, while softer high-density polyethylene reference prices and higher feedgas costs weighed on performance.
For TOP, weak domestic demand pushed exports to 25% of output from 11% in the preceding quarter. Market gross refining margin slipped to US 20.1 per barrel from US 21.2, despite stronger diesel spreads. Aromatics and lube-base EBITDA nevertheless increased by 23% and 22.4%, respectively.
Near-term pressure, with cost relief expected in 2027
CGSI expects PTT’s fourth-quarter profit to decline further as refinery inventory losses and higher imported gas costs weigh on contributions. Nine-month earnings already represented 93% of both the brokerage’s full-year forecast and Bloomberg consensus estimates.
For TOP, CGSI forecasts a fourth-quarter net loss of THB1.3 billion. An indicated market refining margin of US 8.2 per barrel, excluding government diesel-price intervention, and inventory losses of US 6.2 per barrel would leave an accounting margin of US$2.0. The brokerage kept its 2026–2028 earnings-per-share forecasts unchanged despite the third-quarter earnings beat.
The outlook improves in early 2027, according to CGSI. PTT could benefit as European gas restocking demand fades and Qatari exports increase, while lower Middle Eastern crude premiums could lift TOP’s first-quarter refining margins.
Key downside risks include weaker-than-expected gas separation plant utilisation for PTT and further government intervention in diesel prices for TOP.
