PTG’s Businesses Are Not All about Oil Anymore!

PTG Energy Public Company Limited (PTG) is one of the most popular stocks for individual investors that love speculation which causes the share prices to keep rising and sinking in the past. When compared to other oil-related shares in terms of share price, PTG has ups and downs more than the others.

 

When looking at PTG’s financial statements, the company actually performs quite well. In 2015, PTG had 650 million baht of net profit from a total revenue of 53,839 million baht. In 2016, the company booked 1,073 million baht of net profit from a total revenue of 64,926 million baht.

As for 2017, PTG recorded 913 million baht of net profit from a total revenue of 84,904 million baht, and a net profit of 624 million baht from a total revenue of 108,142 million baht in 2018. In the first half of 2019, PTG posted a net profit of 947 million baht from a total revenue of 60,623 million baht.

 

Sadly, its gross profit margin (GPM) is a little on a lower side. In 2015 – 2018, PTG’s GPM were 1.21%, 1.65%, 1.08% and 0.58%, respectively. In the first half of 2019, the company’s GPM was 1.56%.

It could be the cost from business takeover and further investment in branding that keeps PTG’s cost so high to the point that results in lower GPM. If PTG could break free from this shackle, a high growth in the business will be within reach.

 

Which is possibly why the company tries to focus on non-oil business as of late. Maybe the objective of expanding 2,000 gas stations might be close to achieve and could not expand any further at the moment.

What PTG could do is to expand its business lineup such as food and beverage, car salon etc. Which is the reason why some of the gas stations have Phan Thai Coffee Shop while some branches have Coffee World, Krua Ban Jit Thai Dishes, Max Mart, and service & maintenance Autobacs.

 

The latest development was the acquisition of 100% shares from Jitramas Catering Co., Ltd. (JTC) to support the food and beverage business under PTG’s network and to increase flexibility in the determination of business direction. The move can be seen as an adjustment of PTG’s portfolio in F&B business while making it clear that the company is going full-throttle in non-oil business.

There are also a variety of business for PTG to  further its investment. But right now, let’s see how much of an impact the non-oil business reflects on PTG’s profit and revenue.

 

As for the constant decline in the past few days might due to the worry of the 3Q19 statement that might turn out to be not as what has been expected as the business is in its low season.

However, analysts believe that PTG would perform better than anticipation, expecting a net profit in the quarter to report at 227 million baht, slightly higher than the same period of last year, but decreases 47% compared to the second quarter of 2019. Nevertheless, the profit is expected to recover in the fourth quarter.

Which is why the target price of PTG is at ฿24.00/share with a huge gap for an upside for investors.