#Dao Securities #Thailand Stock Exchange – Dao Securities believes that SPRC’s performance in 4Q23E is likely to be its lowest point and expects SPRC to return to reporting profits in 1Q24E.
Dao Securities maintains its “buy” recommendation, but adjusts the price target up to 9.50 baht (originally 11.00 baht) based on a new 2024E PBV of 1.00x (around -1.30 SD lower than PBV average of the last 5 years). estimated that the company will again report a loss in 4Q23E of 4.3 billion baht, compared to a profit of 260 million baht in 4Q22 and 4.2 billion baht in 3Q23, making the full-year performance you become a loss. This loss is mainly due to 1) marketing costs (market GRM) which decreased as a result of the weak crack spread and ship-to-ship costs from transportation points. Sea Oil Transfer (SPM) has not yet resumed operations and 2) recognition of possible share losses. However, it is believed that the company’s operating results are expected to recover QoQ in 1Q24E from crude oil volumes. Higher refinery input and premium lower crude.Given the negative performance, we believe the company will not pay dividends for 2023E results.
Adjusted net profit forecast for 2023E to a net loss of 960 million baht, mainly to account for the disappointing performance in 4Q23E. Also adjusted profit forecast for 2024E by 30% to 2.8 billion baht to reflect assumptions 1) reduction of market GRM to 5.6 USD/bbl from 6.0 USD/bbl, assuming lower gasoline cracks and ongoing ship-to-ship costs, and 2) refinery input reduced to 155 thousand barrels per day (kbd). ) from the original 165 kbd
The share price is down 2%, but has outperformed SET by 8% over the last 6 months, reflecting that it is a global company with less domestic exposure than the market. SPRC is currently trading at an attractive valuation of 2024E. PBV 0.85x (approximately -1.90 SD lower than the average PBV over the last 5 years). It is believed that the performance of 4Q23E will likely be the low point of this year. The company is expected to return to reporting profits in 1Q24E, supported by refineries recovering on a quarterly basis after domestic competitors closed their doors unplanned. The crude oil premium also tends to decline, which is likely, and will have a positive effect on the market’s GRM.
2024-01-19 04:31:47
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