PTT

Maintain FY2014-2015 earnings forecast BUY

PTT Plc

- 3Q14 profit to drop 27.7%qoq from weak refinery business

PTT's 3Q14 net profit is estimated at B22bn, dropping 27.7%qoq. Stock loss

from refineries (TOP, PTTGC, IRPC, SPRC, and BCP) is projected at B4-

5/barrel because Dubai crude oil price has dropped by over US$10/barrel at

end-3Q14, while PTTEP's 3Q14 net profit is reported at B15.3bn, dropping

16.0%qoq. Overall, 9M14 net profit is estimated at B79bn, rising 1.9%yoy,

making up 81% of FY2014 earnings forecast.

- Maintain FY2014-2015 earnings forecast

We maintain FY2014-2015 earnings forecast under the global oil price

assumption of US$100/barrel in 2014 and US$90/barrel in 2015. Although

FY2015 global oil price assumption decreases, PTT's net profit is estimated

to grow by 5.1%yoy in 2015 after increasing by 4.6%yoy in 2014 thanks to

higher sales volume from every business. PTT's GSP#5 and TOP's refinery

will be working at their full capacity for a full year in 2015 after a

maintenance shutdown in 2014, and PTTEP would recognize income from

Zawtika project for a full year in 2015. In addition, as NGV price is raised by

B1/kg to B11.50/kg (effective from October 1, 2014 on), loss from NGV

sales is projected to drop by B4bn/year.

- BUY

We derive PTT's fair value (DCF) at B354 in 2014 and B405 in 2015. Though

FY2014 fair value implies a limited upside, the current share price still has

10.1% upside from FY2015 fair value. Also, dividend yield can be expected

at 4%p.a. We reiterate BUY.