We estimate a 2024 target price of 72 baht on a P/BV basis of 5.2 billion baht (+15%yoy,+78% qoq) in 1Q24F and 35% of our full-year profit forecast.
We estimate a 2024 target price of 72 baht on a P/BV basis of 5.2 billion baht (+15%yoy,+78% qoq) in 1Q24F and 35% of our full-year profit forecast.
A significant increase in profit qoq will be due to (i) profit from oil stocks (ii) increase in market GRM because i) it will get minimum negative impact from official regulations ii) CFP scheme starting in 2025
1Q24F profit was 5.2 billion baht, up 15% YoY and 78% QoQ.
We expect TOP's net profit to be 5 billion baht in 1Q24, increasing both yoy and qoq due to this) turning 100 million baht oil shares into profit from 3.3 billion baht oil shares and 3.6 billion baht oil shares in 4Q23. 1Q23 ii) Expected
I) TOP's market GRM increased 27% qoq to US$9.1/bbl (from US$7.1/bbl in 4Q23 and US$10/bbl in 1Q23) due to higher crack spreads in both petrol (+43%qoq) and diesel (+9). will increase. % qoq) and ii) Marban crude premium fell to US$1.1/bbl (-66% qoq), crude refining rates fell to 112% in 4Q23 and CDU#3 in 1Q23 due to unscheduled maintenance shutdown for 13 days.Additionally, in the aromatics business, supply Being tighter, we expect BZ's spread to increase to US$157/t (+77%yoy, +120%qoq ) to boost profitability. For special items, we expect TOP to book a foreign exchange loss of 900 million.
Baht (gain from foreign exchange of 1.2 billion baht in 4Q23 and 600 million baht in 1Q23) and loss on derivatives of 100 million baht (gain of 900 million baht in 4Q23 and 500 million baht in 1Q23), but excluding special items, normalized net profit was 6.2 billion baht ( +78% yoy,+634% qoq).
Profits are expected to decline QoQ in 2Q24 due to lower market GRM.
Cracks of jet fuel and diesel fell 30% and 28% qoq to US$14.9/bbl and US$16.7/bbl respectively in 2Q24TD, affected by neutrality in Europe and spreads as current middle distiller stocks are below five-year averages. Meanwhile, gasoline prices will remain high due to the US driving season in June 2024.
Estimate Buy recommendation and target price at 72 baht.
Our target price is based on P/BV of 0.95x (mean -0.25SD), TOP's current share price is assumed to be P/BV of 0.8x (mean -1S.D.), but we think TOP shares should hold. Cheaper as operating results may enter a cycle past the lowest point this year.
A new round of hikes in 2025. We expect revenue to grow at a CAGR of 52% during FY24-26F and ROE to increase from 8.8% in 2024F to 17.1% in 2026F.
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