Thai Oil
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Topped by headwinds Downgraded to trading sell Share price: Bt 55.00, target price: Bt 56.00
Thai Oil Plc (TOP)
We believe TOP will be a key loser if oil demand weakens on the back of a global recession. Meanwhile, poor refining margins
and increasing risk of inventory losses due to oil price volatility will pressure earnings in 2H11 and 2012. We slash our target price (basis lowered from 6x EV/EBITDA
to 4x to reflect greater demand and market risks) in the wake of cuts to our earnings forecasts given lower refining margins and a valuation rollover to end-12. We downgrade TOP to TRADING SELL.
