Target price : Bt17.20
Recommendation : BUY
Closing Price (7 May 09) : Bt15.40
1Q09 profit above market view
- PTTAR, Thailand's largest integrated aromatics refinery reported a net profit rise of 17.1% YoY in 1Q09, helped by gains from hedging at its refining unit. Excluding hedging gain, PTTAR turned in an operating loss.
- The profit outlook will remain strong in 2Q09.
- We raise our 2009 net profit outlook for PTTAR by 20.3% to Bt6,800m.
- We also upgrade our rating on PTTAR to 'BUY' from 'SELL' and lift our 2009 price target to Bt17.20/share.
1Q09 net profit up 17.1% YoY on the back of gains from hedging at refining unit; excluding hedging gain, PTTAR turned in an operating loss
PTTAR, Thailand's largest integrated aromatics refinery posted sales of Bt42,896m in 1Q09, down 38.5% YoY but up 43% QoQ. Net profit for the quarter came in at Bt1,742m, or Bt0.59 a share. The profit figure was 17.1% higher than in the same quarter in 2008 and marked a turnaround from a huge loss of Bt10,679m in the prior quarter. The result also came in 9.4% above a market forecast of Bt1.59b. In this quarter, PTTAR swung to a net profit from a net loss in the prior quarter, as oil inventory losses narrowed 76.6% QoQ to Bt3,714m from Bt15,865m and an exceptional gain of Bt5,141m from reversal of inventory write-downs (as a result of crumbling oil prices late last year) helped boost the bottom line. PTTAR recorded a FX loss of Bt377m in this quarter, up 79.2% QoQ but reversing a year-ago gain of Bt1,210m. On a YoY basis, the 17.1% profit rise was credited chiefly to a net gain of Bt2,425m from hedging at its refining unit. Note that hedging contracts expired in 1Q09 were worth Bt852m and hedging contracts due to expire in 2H09 are worth Bt1,573m. Stripping out the FX effect and ex-items, PTTAR posted an operating loss of Bt305m in 1Q09 against a year-ago profit of Bt587m. On a QoQ basis, the operating loss narrowed sharply from the prior quarter. The main culprits behind the operating loss, excluding hedging gain, in this quarter were: (i) continued losses on the aromatic petrochemical side dogged by negative product-to-feed margins of US$23.53/ton against a year-ago aromatics spreads of US$0.49/ton; and (ii) a 12.8% drop in market GRM, excluding oil stock and hedging gain/loss, to US$4.21/barrel from a year-ago level of US$4.83/barrel.
Continued strong earnings outlook for 2Q09
Continued profit improvement is expected in 2Q09 on the back of the following earnings drivers:
(1) The aromatic petrochemical business is poised to return to profitability in the second quarter as benzene and paraxylene product prices have now headed back up. For 2Q09 to date, benzene product prices surged 50.8% to US$634/ton and paraxylene prices jumped 26.8% QoQ to US$1,800/ton, on average; and
(2) The refining unit is expected to see more gain from hedging and book about Bt25m-Bt30m of business interruption insurance compensation for lost revenues as a result of leaks to the heat exchanger of hydro-cracking unit (HCU).
2009 net profit outlook raised by 20.3% to Bt6.8b; upgrade to BUY with new 2009 price target of Bt17.20/share
Gains from hedging prompt us to raise our 2009 net profit outlook for PTTAR by 20.3% to Bt6,800m or Bt2.29 a share from a previous estimate of Bt5,654m. The upward earnings revision, in turn, leads us to lift our 2009 price target to Bt17.20/share, based on a P/E multiple of 7.5x. We also upgrade our rating on PTTAR to 'BUY' from 'SELL.' The new target still offers 11.7% upside from the latest closing price of Bt15.4/share.
By Phillip Securities (Thailand) Plc. on May 11, 2009
USA Cities
Anchorage Alaska,Cleveland Ohio,Milwaukee Wisconsin,Tucson Arizona,Rochester New York ,Indianapolis Indiana,Miami Florida,Chandler Arizona,Baltimore Maryland,Aurora Colorado,North Hempstead New York,St. Petersburg Florida ,Toledo Ohio,Chicago Illinois ,San Francisco California ,Glendale Arizona,Fort Worth Texas ,Atlanta Georgia,Los Angeles California,Oakland California,Stockton California,Akron Ohio,Fort Wayne Indiana ,Hempstead New York ,Brookhaven New York ,San Antonio Texas,Raleigh North Carolina ,San Jose California ,Long Beach California ,Orlando Florida,Chula Vista California ,Henderson Nevada,Seattle Washington,Mesa Arizona,Portland Oregon ,St. Louis Missouri ,Cincinnati Ohio,Lexington-Fayette Kentucky,Dallas Texas ,Denver Colorado,Newark New Jersey ,New Orleans Louisiana ,Virginia Beach Virginia ,Hialeah Florida,Bakersfield California,Washington District of Columbia,Reno Nevada,Philadelphia Pennsylvania ,Lubbock Texas,Austin Texas,Greensboro North Carolina ,Norfolk Virginia,Charlotte North Carolina ,Laredo Texas,Birmingham Alabama,Modesto California,Santa Ana California ,Memphis Tennessee,Tampa Florida,Babylon New York ,Plano Texas,Scottsdale Arizona,Houston Texas ,San Diego ,Chesapeake Virginia,Columbus Ohio,El Paso Texas ,Detroit Michigan,Jersey City New Jersey,Corpus Christi Texas ,Phoenix Arizona ,Las Vegas Nevada ,Buffalo New York ,Islip New York ,Anaheim California,Albuquerque New Mexico ,Pittsburgh Pennsylvania,Boston Massachusetts,Arlington Texas ,Riverside California,Wichita Kansas ,Baton Rouge Louisiana ,Kansas City Missouri ,Minneapolis Minnesota,Oklahoma City Oklahoma ,New York New york,St. Paul Minnesota ,Madison Wisconsin,Omaha Nebraska,Colorado Springs Colorado ,Lincoln Nebraska,Garland Texas,Honolulu Hawaii,Fresno California,Sacramento California,Jacksonville Florida,Nashville-Davidson Tennessee,Tulsa Oklahoma,Durham North Carolina ,Oyster Bay New York
ไม่มีความคิดเห็น:
แสดงความคิดเห็น