วันจันทร์ที่ 25 พฤษภาคม พ.ศ. 2552

Phillip Stock Brokerage Firms Recommends Buy PTT

PTT – PTT

Target price : Bt209
Recommendation : BUY
Closing Price (15 May 09) : Bt235

1Q09 net profit below forecast
- PTT posted a net profit of Bt7,449m in 1Q09, down 71.5% YoY but up 133.6% QoQ.

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- Lower contribution from affiliates and weak gas business dented profit in 1Q09.
- We foresee sequential QoQ profit improvement in 2Q09. At current prices, we rate PTT shares a 'BUY on Weakness' with a 2009 price target of Bt235/share.

1Q09 net profit of Bt7,449m down 71.5% YoY but up 133.6% QoQ
PTT, Thailand's top energy firm racked up sales of Bt303,509m in 1Q09, down 35.5% YoY and 9.96% QoQ. Net profit for the quarter came in at Bt7,449m, or Bt2.64 a share, down 71.5% YoY. On a QoQ basis, the profit figure marked a turnaround from a massive loss of Bt22,189m in the prior quarter. The results came in 25.5% below an average market estimate of Bt10,000m in a Reuters poll of analysts and 44% short of our forecast of Bt13,290m. The exceptionally low gross margin of 9.9% in gas business, halving our forecast of 19%, and higher-than-expected effective tax rate of 42.4%, well above our forecast of 28.5% were to blame for the much lower-than-expected first-quarter results.

1Q09 profit pressured by lower contributions from affiliates and weak gas business
PTT generated total EBITDA of Bt26,360m in 1Q09, down 28.4% YoY but up 19.4% QoQ. On a YoY basis, the sharp profit decline of up to 71.5% was attributed to: (i) a big drop of 68.9% in profit contribution from affiliates to Bt2,407m from a year-ago level of Bt7,738m, and (ii) a deteriorating operating performance at gas business. EBITDA of the gas business was down 58.8% YoY but flat QoQ at Bt5,572m. On a QoQ basis, the profit improvement contributed to: (i) positive EBITDA of Bt2,753m at oil business, against negative EBITDA of Bt1,929m in 4Q08 hit by oil inventory losses, and (ii) a return to profit of Bt2,407m from its affiliates from a huge loss of Bt23,889m in 4Q08.

Sequential QoQ profit improvement expected in 2Q09; 'BUY on Weakness' rating with 2009 price target of Bt235/share
Though the first-quarter results fell far short of forecasts and upward revision of effective tax rates for 2009 is likely after we obtain more information, we however remain positive on the earnings outlook in the second quarter. We expect earnings to improve sequentially in 2Q09. At current prices, we rate PTT shares a 'BUY on Weakness.' Our 2009 price target is unchanged at Bt235/share, based on a P/E of 12x.

By Phillip Securities (Thailand) Plc. on May 18, 2009

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