The Bangchak Petroleum
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Solar power business to boost profit in 2015 BUY
The Bangchak Petroleum Plc (BCP)
3Q14 net profit drops 70%qoq as expected
BCP's net profit was reported at B381m, falling 69.7%qoq (as expected).
Stock loss of US$4.89/barrel or B1.4bn was recognized, marketing margin
dropped from B0.80/liter in 2Q14 to B0.71/liter in 3Q14, and B521m nonrecurring
insurance claim for property damage in 2Q14 was not booked in
3Q14. Overall, 9M14 net profit was B3.2bn, decreasing 19.3%yoy, making
up 79% of FY2014 earnings forecast.
- Power plant business to boost profit in 2015
We maintain FY2014-2015 profit forecast. BCP's profit in 4Q14 is projected
to rebound from 3Q14. GRM is projected to rise in late 4Q14 (winter), oil
sales through petrol stations would increase in 4Q14 thanks to tourism
season, and profit from solar power business would be strong because
winter is usually a high season of a solar farm since the intensity of sunlight
during the quarter has high potential for power generation. BCP's earnings
are projected to fall by 13.2%yoy in 2014. However, it would revive by
16.3%yoy in 2015. Profit from all three phases of 118-MW power plant
would be fully recognized, and the refinery would be working at its full
capacity after a 45-day shutdown in 2014.
- 5% p.a average dividend yield
We switch to use FY2015 fair value (DCF) of B37.5. We reiterate BUY for
steadily strong earnings growth and 5%p.a. average dividend yield.
