Finance Ministry to buy 150 million PTTOR shares; analysts, fund managers upbeat about growth potential

PTTOR will go public late this month to raise up to Bt54 billion in what looks set to be one of Thailand’s largest listings this year.
“We expect good dividend payments as PTTOR businesses are expected to achieve high growth rates,” Prapas said.
To fund its investment in PTTOR, the ministry will sell about 5 per cent of its Bangchak Corp shares to the Vayupak Fund, he said. The Finance Ministry is the Vayupak Fund’s largest shareholder.
Meanwhile, BBL Asset Management CEO Peerapong Jiraservijinda said his mutual fund will buy 143.15 million PTTOR shares. A cornerstone investor, BBL Asset is making the second largest investment after the Finance Ministry.
PTTOR shares are good long-term investments despite risks including technology disruption, as PTT’s management have shown their capability in managing the group’s businesses, Peerapong said.
PTT is Thailand’s largest filling station operator, while its retail arm PTTOR is best known for its Amazon chain of coffee shops. The company has potential to expand both its filing-station and coffee businesses abroad, he added.
PTT boast a 39 per cent share of the filling station market, operating 1,900 stations in Thailand and 318 in other Asean countries. PTT’s dealer-owned model reduces its risks, said Peerapong, adding the company is in a strong position to make merger and acquisition deals.
The target price of PTTOR shares is estimated at Bt25-Bt27 in the next three years, with projected earnings per share of Bt1.25-Bt1.35, he said. With an IPO price of Bt18 per share, its price-to-earnings (P/E) ratio is 20 times. 
PTT’s non-oil business is a world leader due to high growth rate, added Peerapong.
Chavinda Hanratanakool, CEO and managing director at Krung Thai Asset Management, was also confident that PTTOR’s business would continue to grow. Changing consumer behaviour has seen filling stations become rest stops for travellers, so their convenience and coffee shops are benefiting from travel spending, she said. As such, PTTOR’s share price is expected to rise, said Chavinda.
UOB Kay Hian Securities strategist Kitpon Pripisankit reckoned the IPO price of Bt16-Bt18 is quite high given PTTOR’S past performance of P/E at 23.9-26.9 times. But taking into account its profit forecast this year, its projected P/E is just 16-18 times – making the Bt16-Bt18 IPO price attractive to investors due to potential growth of its retail oil and non-oil businesses, he said. A fair price would be Bt22 per share, he added.
Investors expect PTT will set the IPO price at Bt18, which has upside potential of 20 per cent, said Kitpon.