PTT

PTT Plc 

- To complete unfinished deals by 1H15   

 

There was nothing new from the analyst meeting yesterday; only progress of existing deals was reported. 1) For PTT's plan to sell its entire shares of 27.22% in BCP, it has become certain that 15.25% will be sold to Vayupak Fund, while the rest 11.97% will reach a conclusion about the buyer within 1Q15. 2) GPSC will be listed on the SET by 2Q15. 3) Gas pipeline separation and third party access code (TPA) implementation would not happen in the near future; they have to wait until construction of the fifth pipeline is complete. In addition, PTT’s management believes the energy business will be adversely affected by weak oil prices while the refinery and petrochemical businesses will stabilize from 2014. 

 

- Profit expected above B100bn again in 2015  

 

PTT faced net loss of B26.6bn in 4Q14, slightly better than our projection, mainly due to loss from the group’s impairment provision of B36.7bn. However, we maintain our FY2015 profit forecast, projecting the earnings to rebound 91.5%yoy to B100bn again, which will reflect in net profit since 1Q15 onward. A major driving factor is the restructuring of ex-plant LPG price and retail NGV price; our Dubai price assumption for 2015 is US$75/barrel, down from US$97/barrel in 2014. 

 

- Buy. 2H14 dividend is B5/share   

 

FY2015 fair value (DCF) is B398. We reiterate buying PTT. 2H14 dividend was announced at B5/share (versus B6/share in 1H14), or a half-year dividend yield of 1.5%. XD date is March 3; payment date is April 24.