Analysts Expect Significant Contribution from PTG’s Non-Oil, Recomm. “BUY” at Bt27!

The share price of PTG Energy Public Company Limited (PTG) closed flat in the morning session on March 5, 2021 at ฿21.00/share. However, PTG has gained 32% this year from the closing at ฿15.90/share at the end of 2020, following the recovery in oil prices and the highly anticipated non-oil business.

 

KGI Securities has given an “Outperform” rating on PTG with a target price as high as ฿27.00/share, while revising earnings forecast up by 6% in 2021 and 5% in 2022 in response to PTG’s higher revenue and gross profit margin for its non-oil business.

The security company revised up non-oil revenue 4% to Bt5.1bn this year and 5% to Bt5.6bn next year due to i) higher sales in Max Mart and Punthai Coffee thanks to the country’s economic recovery, ii) expansion of 50 new LPG stations, and iii) acquisition of a 38.26% stake in Siam Autobacs (SAB).

KGI also adjusted up non-oil gross profit margin from 26.5% to 28.5% for both years after the company reported a good non-oil gross profit margin of 28.6% in 2020. The target price was rolled over to 2022 and upgraded to Bt27.00, from Bt21.20, based on a higher P/E of 20.0x, from 19.0x, to reflect the earnings upgrades.

KGI reiterated a rating of Outperform on the counter as the security company was looking forward to new business opportunities such as a downstream hemp business related to wellness beverages in 2Q21 and a new waste power plant with 6MW capacity in mid-2021.

 

Tisco Securities gave a “BUY” recommendation on PTG with a target price at ฿24.50/share, expecting the company to keep growing into 2021 with the second-largest market share across the country. Tisco estimated PTG’s sales volume to increase 8-12%, while the non-oil business will have more contribution for the revenue, especially its coffee business. More importantly, Tisco expected PTG to record higher profit sharing from the Palm Complex project, compared to 2020. Lastly, PTG currently traded at 17x PER, equivalent to -0.5SD of its historical trading.

 

Asia Wealth Securities (AWS) also gave a “BUY” recommendation on PTG with a target price at ฿23.60/share, revising up gross profit to 9.23% (from 8.60% previously) in response to the constant increasing in oil prices, while adding another 5.3% to the net profit forecast in 2021, expecting PTG to report 1,974 million baht of profit.

In addition, the company also offered a dividend payment of ฿0.50/share to be paid on May 21, 2021. The ex-dividend date is March 11, 2021.