6 Analysts Rate “BUY” on PTG over Positive Earnings Outlook in 2H21

Analysts have given a “BUY” recommendation on PTG Energy Public Company Limited (PTG), as the outlook for 2H21 is expected to be better than 1H21 following Thailand’s mass vaccination program, which has boosted the economy. This also resulted in an increase in oil demand, as well as non-oil business that was consistent with the PTG’s core business, such as Pun Thai coffee shop, Coffee World, and Max Mart, which all benefited from economic recovery.

Furthermore, profit margins from the joint venture company (Palm Complex) are predicted to rise in 2H21, owing to increased demand for biodiesel.

Asia Wealth Securities (AWS) said since PTG had bottomed out in 2Q21, the positive outlook for the company shall accelerate in 2H21. Overall economy started to show a sign of recovery. It can be seen from employees returning to their workplace in June, following Thailand’s vaccination campaign, which began in May. Thailand’s economic recovery will be speeded up if it meets its target of offering vaccines to 300,000-400,000 people daily.

Earnings forecasts for the second quarter of 2021 remain under pressure as Covid-19 cases continue to rise. This resulted in a decline in oil demand in both the transportation and tourism sectors. The volume of oil sales would remain steady in comparison to the previous quarter. However, the full-year result is still expected to expand by 9-10%.

For the non-oil business, Pun Thai coffee shop will continue to grow through the introduction of new goods and more promotion. Meanwhile, Coffee World’s revenue is estimated to continue declining YoY and QoQ. This is because most of the Coffee World’s branches are located in airports and shopping malls that are still affected by COVID-19.

Biodiesel profit margins are likely to rise in 2Q21 compared to the same period last year and the prior quarter, as palm prices were approximately 5-6 baht per kg. in April-May. Despite the fact that many palm fruits were delivered to the market during this period, the company received a profit share from the Palm Complex project of 77.7 million baht, down 54.4% YoY and 51.2% QoQ as palm prices surging to 6-7 baht per kg. As a result, profit margins are lowered.

Earnings from the Palm Complex, on the other hand, are likely to back on track in the second half of this year, as demand for biodiesel increases after the epidemic develops and vaccination becomes widespread. Additionally, it is predicted that the shared profit from joint venture companies will be 311 million baht in 2021.

Securities	Recommendation	Target Price
Asia Wealth	BUY	23.60 Baht
Phillip (Thailand)	BUY	24.30 Baht
Tisco	BUY	24.50 Baht
DBS Vickers	BUY	25.00 Baht
KTBST	BUY	25.00 Baht
Capital Nomura	BUY	24.00 Baht