Tuesday, July 8th, 2025

PTT Global Chemical Faces Challenging Outlook Amid Significant Impairment Losses in Q3 2024

Date of Report

25 October 2024

Broker Name

UOB Kay Hian

Company Overview

PTT Global Chemical (PTTGC) is a fully integrated petrochemical and chemical company based in Thailand. The company’s main products are olefins, specifically ethylene and propylene.

Stock Data

  • Share Price: Bt24.90
  • Target Price: Bt24.50
  • Market Cap: Bt113,848.4 million (US$3,398.1 million)
  • Shares Issued: 4,508.8 million
  • GICS Sector: Materials
  • Bloomberg Ticker: PTTGC TB
  • 3-Month Average Daily Turnover: US$18.4 million
  • 52-Week High/Low: Bt41.25 / Bt22.80

Price Performance

  • 1 Month: -9.8%
  • 3 Months: -8.2%
  • 6 Months: -34.8%
  • 1 Year: -24.1%
  • Year to Date (YTD): -34.4%

Major Shareholders

  • PTT: 45.2%
  • NDVR: 4.8%
  • Siam Management Holding: 3.0%

Earnings Overview

Expected Net Loss for Q3 2024

  • Anticipated net loss of Bt10.2 billion, a decrease compared to previous quarters due to:
    • A Bt9.0 billion impairment loss from Vencorex
    • A stock loss of Bt3.6 billion, driven by a US$9.0/bbl decline in crude oil prices from June to September
    • Weaker olefins performance, impacted by declining petrochemical spreads

Core Operational Loss

  • Core operations are expected to show a loss of Bt1.2 billion, an improvement from the previous quarter due to:
    • Stronger performance in the upstream business
    • Aromatics spreads rose by 5% quarter-on-quarter
    • Market gross refinery margin (GRM) remained steady at US$3.2/bbl

Financial Projections

3Q24 Results Preview

  • Revenue: Bt155.5 billion (down 4% year-on-year, down 8% quarter-on-quarter)
  • COGS: Bt148.1 billion (down 1% year-on-year, down 6% quarter-on-quarter)
  • EBITDA: Bt5.9 billion (down 46% year-on-year, down 35% quarter-on-quarter)
  • Core Profit: Expected to be a loss of Bt1.2 billion
  • Net Profit: Expected to be a loss of Bt10.2 billion

Future Outlook

  • 4Q24 Net Loss: Expected to remain flat quarter-on-quarter with another impairment loss of approximately Bt10 billion from PTT Asahi Chemical (PTTAC).
  • Market Conditions: Facing intensified competition and oversupply in the market, leading to a drop in prices for key products such as acrylonitrile and methyl methacrylate.
  • Petrochemical Sector: The outlook for petrochemical spreads is negative, with a decline in aromatics and olefins spreads noted.

Analyst Recommendation

  • Rating: Maintain HOLD
  • Target Price Adjustment: Increased to Bt24.50 for 2025, based on 0.41x 2025F P/B at -2SD.
  • Switch Recommendations: Analysts suggest switching to Bangchak Corporation (BCP) and Indorama Ventures (IVL) as leading stocks within the oil & gas sector.

Environmental, Social, and Governance (ESG) Initiatives

  • CG Report: 5
  • SET ESG Rating: AAA
  • Environmental Goals: PTTGC is committed to achieving net-zero greenhouse gas emissions by 2050 through efficient resource use and cooperation with partners.
  • Social Contributions: The company focuses on creating value for society and supporting community welfare and education.
  • Governance: Emphasis on transparency and innovative, environmentally friendly chemical production.

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