As crude oil prices slow, stock gains may not be seen, so profit momentum in the refining business will decline.
As for petrochemicals in the third quarter of 2023, the spread is not good, however “Btjk” And “ERBC” There is refining work. Thus benefiting from the work of the refinery, but in the fourth quarter of 2023, the refinery does not support it. Petrochemicals don’t have a big rebound.
In terms of source energy, “In order” Keep in mind that Q4 2023 is not great. If we look at normalized earnings, we can only support a quarter, sales volumes are improving but offsetting higher production costs.
As for downstream businesses, such as gas stations “or” In Q3 2023, volume was considered very good as there were inventory gains to help, and in Q4 2023, volume was considered good. Entering the peak season for domestic travel, but margins declined because stock gains were not as large as they were in the previous quarter.
Power plant works “GPSC” Operating results in the fourth quarter of 2023 decreased on a quarterly basis due to seasonal factors due to the onset of winter, and electricity use decreased, including the impact of the measure to reduce the electricity bill to 3.99 baht, which only had an impact in the third quarter of 2023 month Just one but it will have a full quarterly impact in Q4 2023.
Although the Energy Regulatory Authority recently announced an increase in electricity prices of 4.68 baht per unit, this represents the lowest guideline proposed by the Energy Regulatory Authority. We will have to see to what extent the Ministry of Energy will set the price of electricity. This means there is a month before it goes live. Numbers can be modified as well. However, the date and time of the electricity price announcement will be effective in the first quarter of 2024.
In general, companies under the PTT, starting from the initial business, are seen as self-supporting. Transportation businesses such as refineries and petrochemicals are expected to decline on a quarterly basis, transportation businesses such as OR will decline, and electricity will also decline. Therefore, the group’s overall outlook in Q4 2023 is likely to decline on a quarterly basis.
“All seven PTT groups expect net profits in 2023 to reach 207,000 million baht. In 2024, net profits are expected to reach 224,000 million baht, an 8% increase from the petrochemical business that has recovered. PTTGC and IRPC expect better profits. GPSC’s electricity business with better profits. Higher, PTTEP’s profits are expected to be weaker. PTT’s profits are better because its gas business should be better because gas costs are lower and losses from natural gas are reduced. In short, PTTGC, IRPC, GPSC is the champion “
Asked: How do I set up the game to buy a PTT set?
It must be said “BTT Group” Which is the commodity group (commodities), energy prices like crude oil, gas etc., refining margins in 2024 are not outstanding, the picture is slowing down from 2023.
Therefore, it is considered an investment “GPSC” Interesting because earnings grow as bond yields are likely to exceed their peak. The Power Plants group will also benefit, we recommend buying with a target price of 57 baht at the end of 2024, but with the current share price much higher. You may wait for the recap because the 4Q23 and 1Q24 budgets are not pending.
Commodity groups choose PTT because next year the global economy is very fragile. “PTT” is the most comprehensive energy stock. And the returns are very effective. In a situation where the market is fragile, PTT is considered the strongest stock. Financial position is good, D/E is not high, earnings are good, yield is almost 6%. Personally, I think with the outlook for 2024, it is fragile. PTT shares look more defensive than others in the global group.”
“PTTEP” and “TOP” can be traded in cycles, while “IRPC” is not as interesting and if compared to the “PTT group” is probably the slowest to recover. Even the main advantage is that it is inexpensive. But the business of petrochemicals is still polypropylene (PP) belts and ABS plastic pellets are available in abundance in the market. Next year, new production will be added, as ABS will produce durable products such as auto parts, electrical appliances and electronic equipment. These products, during bad economic times, people will decide to buy slowly, which is why IRPC is not interested.
Next year will be the year of the PTT group.
Wiswat Yakanawong, Director of Fundamental Analysis at Krungsri Securities, told Post Today that summary “BTT Group” In 2024, many challenging factors will remain, including oil prices and refining margins that will decline as production capacity increases, as well as power plants facing pressure on government-controlled forint rates.
by “Push to talk” In 2024, there will be a lot of pressure. The price of crude oil has declined from 2023 and Singapore GRM’s refining margin has decreased from increasing the new refinery’s production capacity to 1.8 million barrels per day. Which will come a lot during the second quarter of 2024. Next year’s refining margin will fall to US$4.5-5 from US$6.8 for this year.
Moreover “summit” Next year, there will be an additional factor: the SBM2 oil buoy in the middle of the sea has an oil spill causing costs of about $0.5 per barrel. The impact on the operating profit margin, in addition to the additional production capacity of the refinery.
“Petrochemical Business Group” In 2024, there will still be challenges. For olefins in particular, both HDPE and PP faced new production capacity that was somewhat higher than demand, leading to a year-to-date petrochemical explosion. The year 2024 is not very good, as it is in a declining stage, but in terms of “aromatics”, it may be a little better.
Upstream energy side “In order” In 2024, the volume is expected to increase with the Erawan field increasing its production capacity to 800 million cubic feet per day by April 2024. This will help improve sales revenue, but the price of crude oil in Dubai is expected to decline year-on-year. Which results in a lower selling price. In addition, the Erawan pit price formula is a new price formula. With gas prices lower than the original contract and as a result, the overall average selling price (average selling price (ASP)) decreased despite increased volume.
In another aspect of PTT, the gas separation plant should have a better Run Rate because the price of Erawan increased, which led to the demand for the gas separation plant service, which led to a better production capacity (Utilization Rate), including better margin.
Electrical Works in “GPSC” 2024 may face challenges. Although gas prices are lower compared to 2023, they are still at a relatively high level of 370-380 baht per mmBtu, and there are risk factors from government policy that may keep the FT level at 20 satang in the January period. 2024, causing the SPP Group’s margin to remain low and not recover obviously, which still puts negative pressure on SPP.
So the big picture“push to talk” Gain has positive and negative consequences, so it can only be equal. As for ““In order” Volume should improve but average price will decrease. Profits may not decrease much. Depending on the price of crude oil, the department expects it to fluctuate in the range of $75-85 per barrel. Meanwhile, the crude oil price trend in 2024, if it deepens further, is expected to be at the level of 75-85 US dollars, while if there is a war, the price of oil is expected to reach more than 90 US dollars. But it is noted that it is unlikely to exceed $100 due to inflation.) It also increased. Including next year, there is a possibility that the global economy will enter a recession, which will lead to a collapse in the prices of all products. Certainly, we recommend buying PTTEP with a target price of the end of 2024 at 190 baht.
“summit” In 2024, refining margins are likely to remain weak year-on-year, with a unique positive factor being the Clean Power Project (CFP) starting production in 2025, helping to increase production capacity. The cost is competitive but in the short term, nothing exciting. This is because the refining margin decreased depending on industry factors and the pressure of oil factors.
“Btjk” The refining margin is similar to TOP, but it is a concern that if the Chinese economy does not recover, it will impact the petrochemical group. And maybe olefins are still not good. As for whether it can be revived or not? It depends on the Chinese economy and global market. If China does not recover, petrochemical spreads will not return, and we may have to wait a while. It is recommended to avoid or play trading rounds but not to hold long-term investments.
while IRPC It is similar to PTTGC because it faces challenging factors on both the refinery side and the olefins side, which remains poor. Considered still tired, not very good
“gpsc” A power plant worth watching is the announcement of FT values. In mid-December 2023, it is expected to remain the same at 20 Satang, neither decreasing nor increasing. Because the government is trying to reduce the cost of production of the private sector and help the public sector. As a result, SSP Group’s short-term margins may still face pressure. Therefore, short-term trading is recommended. Waiting for the moment when the price of oil falls as bonds fall, you can speculate. But if the price of oil rises or bond yields increase, that will put downward pressure on GPSC’s stock price.
part “or” The Ministry believes that next year will be completely neutral, as companies are still under pressure regarding marketing fees as the government has issued regulations to control marketing fees. Expanding Amazon Café branches may not increase profits because the number of cups sold is completely saturated. Café Amazon’s sales of 90 million cups in the quarter are very limited. Increasing your margin level may require saving costs and adding new products, which may take some time. The growth of companies that will replace oil sales is likely to be slower.
Even in the short term, an OR stock price that has risen may benefit from the creation of an ESG fund because it has a AAA rating, which could help support fund flows. But the issue that remains a challenge is tourists. As for China, which will enter next year, it is still weak. Demand for oil in the tourism sector may not recover clearly. The global economy may slow down. Local purchasing power that has not yet improved may not support OR’s operating performance much, so this price is not attractive.
OR remains under pressure if the government sector continues to maintain diesel prices. The position of the Oil Fund is still more negative. Currently, the oil fund is negative at 77,000-78,000 million baht. If it continues to turn negative, it could be another pressure on oil service providers that are controlled by marketing fees. Overall, there are still political risks for OR.
“This group to buy is PTTEP. With the price of branded oil at nearly US$80, we believe it is unlikely to fall below this level. If OPEC+ reduces production capacity further, This may cause stock prices to recover in the short term. It is probably the safest and has a high rate of return on dividends. The yield) is very high, 5% level, quite reassuring. If you buy the original PTT now at 35 baht, you can get a return Only 3-4% profit, which is not interesting when compared to PTTEP.Moreover, at the price of PTT now, you may not be able to expect profit from the price difference (capital appreciation).
The second most interesting stock is TOP, and although next year’s refining margin is not good, we believe that in the second half of 2024 people may start trading on factors that will benefit from the Clean Power Project (CFP) that will be completed. , which causes the cost of TOP to decrease significantly, which is another interesting factor.”
Stock price movement Push to talk Trading closed yesterday (December 1, 2023) at 35.25 baht, an increase of 0.50 baht, equivalent to +1.44%, with a trading value of 2,183.36 million baht.
Share price In order It reached 148.50 baht, a decrease of 3 baht, or -1.98%, and the trading value was 1,842.20 million baht.
Share price It comes to you At 38.50 baht, the closing price was unchanged. Trading value: 245.21 million baht
Share price summit It was at 51.25 baht, a decrease of 0.25 baht, representing -0.49%, turnover 150.94 million baht.
Share price IRPC It was at 1.99 baht, an increase of 0.01 baht, +0.51%, with a trading value of 56.72 million baht.
Share price or It was at 20.20 baht, an increase of 0.30 baht, +1.51%, with a turnover of 191.69 million baht.
Share price GPSC It reached 46.75 baht, an increase of 1.25 baht or +2.75%, with a turnover of 473.31 million baht.
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