Brokers view PTTEP's budget differently. KGI sees 2023 profit at new high after accruing additional profit. It is poised to increase its profit target for 2024-25 by investing in wind energy projects, while Bualuong expects year-end profit to fall 22% from last year, but Q1/2024 profit is likely to decline. As for the overall picture to 2024, the outlook for global oil demand remains positive and will continue to expand. UOB expects strong first-line profit this year, recommending both hold and buy.
KGI expects 2023 profits to hit new highs, ready to boost 2024-2025 targets.
Securities analysis by KGI Securities (Thailand) has raised its 2023 profit forecast for PTT Exploration and Production Public Company Limited (PTTEP) by a further 3% to 75.8 billion baht. This was due to an additional gain of approximately US$60 million from the sale of the Cash & Maple petroleum exploration project in 4Q23F.
It raised its profit forecast for 2024 and 2025 by 1% to 64.0 billion baht and 55.1 billion baht, respectively, from recent investment in wind power projects.
As for net profit in 4Q23, it will be 17.4 billion baht (+11% YoY, -4% QoQ), with profit increasing YYY but declining QoQ. This results in asset impairment losses of approximately $125 million in Q4/2023. The COD of the Mozambique project was postponed by 1 year to 1H 2028, although the company recorded an additional gain of around USD 60 million in Q4/23 from the sale of the Cash & Maple petroleum exploration project. It compares to a special loss. $334 million in Q4/22.
But excluding special items due to increased unit costs and lower crude oil prices, PTTEP's core business profit in Q4/23 is expected to decline both YY and QoQ. We recommend a stop with a target price of 165 baht.
Bualuong sees Q4/66 profit shrink 22%, still recommends buy.
Overall in 2024, Pualuong Securities expects global oil demand trends to remain positive and continue to expand, with OPEC+ continuing to cut production capacity, which is expected to help global oil prices stay at $80.
However, the Q1/2024 trend is expected to be a year-over-year decline in core profit trends from normal declines in sales volume and higher average costs and a QoQ decline in average selling prices. (as per market price)
PTTEP's core profit forecast for Q4/2023 is 21.8 billion baht, down 22% YoY (sales volume and average selling price decreased) but up 15% QoQ due to a seasonal increase in sales volume. Also the average price per unit has come down.
212 baht target price is recommended to buy.
UOB says 2023 profits will grow by 6% on the back of strong first-quarter profits this year.
UOB Kay Hien Securities expects core profit to be 16.5 billion baht in 4Q23, down 9% QoQ due to bigger losses on special items. But core profit in 4Q23 increased by 4% QoQ due to increased sales volume. As a result, net profit for the full year 2023 increased by another 6%.
However, core profits in 1Q24 are expected to remain strong from increased sales estimates. Rising crude oil prices due to unrest in the Middle East will continue to support this factor. We recommend buying at a target price of 200 baht.
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