PTG Expects to Upgrade to a Full-Service Center, Analyst Recommends “BUY” at Bt27

Mr. Rangsun Puangprang, Director of PTG Energy Public Company Limited (PTG), stated that the business plan for 2021 is to expand its gas stations from 2,094 to more than 2,200 stations while upgrading its class from only a gas station to a service center.

 

Currently, the company has Max Service as an addition to its business in the gas station, acting as roadside assistance for PTG’s customers within a radius of 10 kilometers, such as battery changing, gas filling or quick repairing. In the future, the service would expand to a full-service center, including route planning, restaurant recommendations, etc.

Mr. Puangprang added that some of PTG’s non-oil business has reached its break-even point, especially the PunThai Coffee which recorded a double-digit growth after Covid-19. The company will make a full advancement in non-oil business this year by improving its marketing strategy with new innovations. In the meantime, the company expected 8-12% growth in oil business this year.

 

In addition, the company has acquired a license to sell cannabis-infused food and beverages and launched its first set of menus to be served through PunThai Coffee and Coffee World in Bangkok on March 19, 2021.

PTG has infused cannabis into its beverage menus such as coffee, tea, and jelly soda. Meanwhile, the company has introduced stir-fried basil with rice, noodles, and a fried cannabis leaf.

Currently, there are 6 branches of PunThai Coffee that serve cannabis-infused products, which are Vibhavadi Branch, Criminal Court Branch, Bangkapi 3 Branch, Luang Phaeng Branch, Chan Road Branch, and CW Tower Branch.

The servings through 4 branches of Coffee World are Siam Paragon Branch, Central Plaza Rama 2 Branch, Future Park Rangsit Branch and Central Plaza Ladprao Branch.

 

KGI Securities has given an “Outperform” rating on PTG Energy Public Company Limited (PTG) with a target price at ฿27.00/share

KGI forecasted PTG to post 1Q21 earnings of Bt512mn (+152% YoY, 724% QoQ). The jump YoY should be supported by a significantly higher oil marketing margin of Bt1.84/liter, up 15% YoY after a sharp decline in crude price from both the COVID-19 outbreak and OPEC+ crude price war last year. The decrease in earnings QoQ should come mainly from lower contributions from oil and biodiesel businesses. PTG’s oil marketing margin is expected to soften 5% QoQ to Bt1.84/liter for the quarter from higher crude price.

In addition, the share of gain from associates is expected to decline 57% QoQ to Bt72mn in 1Q21 due to no large stock gains like in 4Q20. KGI reiterated a rating of Outperform on the counter with a 2022 target price of Bt27.00, based on 20.0x P/E. KGI stated that it preferred PTG as the company is expanding with new potential business opportunities such as a downstream cannabis and hemp business related to food & beverages in 2Q21 and a new waste power plant with 6MW capacity in mid-2021.