PTT Global Chemical

PTT Global Chemical Plc (PTTGC)
 
We like PTTGC’s integrated and gas-based, oil-driven downstream expansion growth story, which positions the company well for the next petrochemical upcycle. Synergy and expansion from the merger could further catalyse earnings growth post 2011. We initiate coverage on PTTGC with an OUTPERFORM (target price basis of 7x CY13 EV/EBITDA). We project a strong core earnings CAGR of 43% for 2011-13, which would be fuelled by volume growth, oil-driven margin expansion and synergy and expansion benefits from the merger.