PTT

PTT Plc  

 

- 2Q15 profit grows as projected  

PTT posted 2Q15 net profit of B23.7bn or a growth of 5.1%qoq, close to our projection. Although profit of PTTEP declined significantly by 84.8%qoq and there were hedging loss of B3.2bn and Fx loss of B3.3bn, those negative factors were negated by profit from the natural gas business that almost doubled from the prior quarter, shared profit from subsidiaries that grew 28.7%qoq, and capital gain of B2.4bn (after tax) from BCP share selling. Overall, 1H15 net profit was B46bn, decreasing 20.0%yoy and accounting for 53% of FY2015 forecast. 

- Forecast cut likely due to oil price and Fx rate  

We are likely to revise down our FY2015 forecast, projecting profit in 2H15 to weaken from 1H15. According to the current forecast, 2H15 profit would make up 47% of our full-year estimate, yet there is risk of Fx loss and stock loss in 1H15 and 3Q15 that we have not included in our forecast. Therefore, we are revising our profit forecast after an analyst meeting tomorrow (August 18), based on a reduction of Dubai crude oil price assumption to US$53/barrel in 2015 and US$65/barrel in 2016 and a revision of Fx rate forecast from B33/US$ to B34/US$. 

- Share price partly absorbs negative factors  

2015 fair value (DCF) is B385; we recommend BUY. The share price has undergone 20% correction from the peak, already reflecting some of the negative factors until it has a limited downside now. This is a good time for investment. Dividend yield can be expected regularly at 4.6%p.a. on average.