6 Refinery Stocks Rise in Response to a Hike of GRM, Analyst Recommends “BUY” TOP at ฿88

As of 14.50 local time in Thailand, Thai Oil Public Company Limited (TOP) was at THB72.25, increasing THB1.26 or 1.76%. The highest of TOP’s share price was at THB73 and the lowest was THB71.50 with a trading value of THB2,212 million.

PTT Global Chemical Public Company Limited (PTTGC) was at THB62.25, increasing THB0.25 or 0.40%. The highest of PTTGC’s share price was at THB62.75 and the lowest wasTHB62 with a trading value of THB866 million.

Star Petroleum Refining Public Company Limited  (SPRC) was at THB10.60, increasing THB0.60 or 6%. The highest of SPRC’s share price was at THB10.60 and the lowest was THB10.30 with a trading value of THB917 million.

Esso (Thailand) Public Company Limited (ESSO) was at THB11.10, increasing THB0.40 or 3.74%. The highest of ESSO’s share price was at THB11.30 and the lowest was THB10.70 with a trading value of THB651 million.

IRPC Public Company Limited (IRPC) was at THB5, increasing THB0.08 or 1.63%. The highest of IRPC’s share price was at THB5.10 and the lowest was THB4.94 with a trading value of THB689 million.

Bangchak Corporation Public Company Limited (BCP) was at THB31, increasing THB0.50 or 1.64%. The highest of BCP’s share price was at THB31.25 and the lowest was THB30.75 with a trading value of THB112 million.

The rise of refinery oil sector’s share price was due to Singapore’s GRM rose to a level of USD7 per barrel.
Mr. Pichai Lertsuphogkit, an assistant marketing manager estimated all of the stock in a refinery oil sector has increased in the morning due to the response of GRM that has recovered continuously.
However, Mr. Pichai viewed the recovery of GRM as temporary after the price was at USD3 per barrel as well as a sharp decrease of the refinery stock previously. Today, the refinery stock has recovered again based on Singapore’s GRM.

Bualuang Securities recommended “BUY” TOP share with the target of THB88/share, based on PBV of 1.1x, lower than the past 1.5x. Additionally. Bualuang estimated a 3Q19 profit to strongly recover from 2Q19 due to no inventory loss. The factor that should keep an eye on is Atlantic hurricane in August – October. Bualuang estimated there will be 4-8 hurricanes this year and it might affect oil refinery factory.

Maybank Kim Eng Securities rate a “BUY”  PTTGC share for a long-term investment with a target price of THB74/share, based on PBV of 1.1x, lower than the 7-year average, due to pressures from by slow demand with excess supply. Moreover, Maybank expects 2Q19 earnings to slow down, in tandem with shrinking petrochemical spreads, pressured by the global economic slowdown. However, Maybank believes the stock has limited downside, thanks to its undemanding valuation with a PBV of 0.9x and FY2019 dividend yield of 4.7%. Furthermore, being a low-cost gas-based producer, Maybank believes it should help PTTGC to withstand the weak market situation.