PTT
Key takeawayCurrent LNG capacity could contribute up to Bt5bn earnings p.a. 50% of CAPEX plan for 2012-2016 is allocated for investment and another 33% in gas business Rising NGV prices provide near-term catalysts from site visit Buy; Bt323.00
PTT Plc
We had a fruitful one-day site visit to Phuket last week, arranged by PTT. For LNG, PTT has completed regassification plant last year (US$880m CAPEX). The LNG facility has infrastructure to double its current capacity of 5m tons up to 10m tons. Current LNG consumption in Thailand of 1m tons contributes an estimated Bt1bn earnings for 2012. Current capacity will be able to serve domestic demand for another five years. LNG represents 3% of Thailand gas consumption.LNG should contribute Bt1bn earnings p.a
CAPEX plan of Bt358bn from 2012-2016. Management has allocated 50% of capex for PTT’s investment and 33% for gas business. No detail for investment was disclosed. Most investment in gas business is for 4th onshore gas transmission pipelines (Rayong to Kaeng Khoi, Wangnoi to Nakornsawan and Kaeng Khoi to Nakornsatchasima). PTT’s board has already approved the Bt185bn budget. Of total, 61% of the budget is for domestic investment another 39% for overseas.
BUY, TP Bt380. The Thai government recently agreed to raise retail prices of natural gas for vehicles (NGV) from 16 Jan 2012, to Bt14.5/kg for personal use vehicles and Bt12.5/kg for public transport vehicles, from current Bt8.5/kg in monthly increments of Bt0.5/kg. The NGV price hike would raise PTT’s earnings by c.Bt7bn p.a. from 2013 onwards, or 5% p.a. We have revised our assumption for oil, gas, and petrochemical prices, and raised earnings by 24% in 2011 and 8% in 2012 (details to be released in our regional report this week).
CAPEX plan of Bt358bn from 2012-2016. Management has allocated 50% of capex for PTT’s investment and 33% for gas business. No detail for investment was disclosed. Most investment in gas business is for 4th onshore gas transmission pipelines (Rayong to Kaeng Khoi, Wangnoi to Nakornsawan and Kaeng Khoi to Nakornsatchasima). PTT’s board has already approved the Bt185bn budget. Of total, 61% of the budget is for domestic investment another 39% for overseas.
BUY, TP Bt380. The Thai government recently agreed to raise retail prices of natural gas for vehicles (NGV) from 16 Jan 2012, to Bt14.5/kg for personal use vehicles and Bt12.5/kg for public transport vehicles, from current Bt8.5/kg in monthly increments of Bt0.5/kg. The NGV price hike would raise PTT’s earnings by c.Bt7bn p.a. from 2013 onwards, or 5% p.a. We have revised our assumption for oil, gas, and petrochemical prices, and raised earnings by 24% in 2011 and 8% in 2012 (details to be released in our regional report this week).
