Energy
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Favor PTT over PTTEP Neutral
Energy
- OPEC maintains production target, putting oil price under US$75
OPEC members agreed to keep the group’s output target at 30 million
barrels/day, which is consistent with the plan of Saudi Arabia, the world’s
major oil producer, to maintain the oil production target in order to preserve
the market share. As a result, global crude oil prices dropped under
US$75/barrel for all three markets, hitting a four-year low (Dubai
US$72.1/barrel, Nymex 68.7/barrel, and Brent US$71.7/barrel).
- PTT can stand friction better
Tentatively, we maintain the assumption of Dubai crude oil price in 2015 at
US$90/barrel; it is believed that the plunge in the crude oil prices would
continue only for the short term since it would cause non-OPEC oil
producers that bear the production cost of over US$70/barrel to reduce
their output, which would result in a decrease in oil supply. According to a
sensitivity analysis (page 3), in the worst case scenario that an average
crude oil price in 2015 drops to US$60/barrel, 2015 fair value of PTTEP and
PTT would be B123.5 and B364.6, which imply a 13.6% and 6.5% downside
from the current share prices, respectively.
- Favor PTT over PTTEP
We maintain NEUTRAL for the sector; 2015 fair value is B405 for PTT and
B180 for PTTEP. We favor PTT over PTTEP amidst the decreasing oil price
since PTT still has positive factors that are not yet included in our forecast,
which are an increase of NGV price and ex-gas separation plant LPG price
and gain from BCP share selling and SPRC and GPSC listing in the SET.
