Company Overview
PTT Public Company Limited (PTT TB) is a Thailand-based company engaged in the gas and petroleum businesses. The Company supplies, transports and distributes natural gas vehicle (NGV), petroleum products and lubricating oil via service stations throughout Thailand and also exports to overseas markets. Through its subsidiaries and affiliated companies, the Company is involved in exploration, production, refinery, marketing and distribution of petroleum, petrochemical products and aromatics. In addition, the Company operates international trade businesses, including import and export of crude oil, condensates, petroleum products, petrochemicals, and sourcing of international transport vessels and carriers.


Investment Overview
Softer oil price expected in 2026F. We expect Brent prices to have fluctuated in the range of USD62-67/bbl in 2026F. This is in light of continued OPEC+ press for higher production, which is expected to depress the fundamental demand-supply balance for the oil market, especially ahead of the seasonally weaker demand period of the year. The geopolitical environment, however, remains fluid. Moreover, EIA/OPEC/FGE have projected that global oil demand will grow c.1.1-1.4mbd this year (vs. 1.0-1.4mbd in 2025F), slightly higher than 2025F from solid demand for transport and industrial fuels.

High regulatory risk on the cards. To help alleviate elevated electricity prices, the government is in discussions with relevant parties regarding the adoption of a single pool gas structure. Such a structure will adversely affect the business performance of gas separation plant units, as the cost of natural gas feedstock will rise. Thus, this ongoing uncertainty poses a high regulatory risk to PTT. Currently, the government and related parties are reviewing appropriate implementation processes.

HDPE/PP/crude prices are key determinants of financial and share price performance. PTT’s core business is driven by its upstream (crude oil, natural gas, and LNG), refinery (market GRM), and chemical (HDPE/PP prices) businesses. Of these, we believe the crude oil price, as well as government action on national policy, will have the most impact on share price performance.

Maintain HOLD rating. We maintain our HOLD rating with a slightly lower FY26F target price of THB35, based on an SOTP valuation using a WACC of 9.93%. Our cautious stance reflects: i) rising regulator risk from the potential re-adoption of the single pooled gas price mechanism, which could reduce GSP profitability (we estimate the scheme reduced GSP EBITDA by c.THB18bn in 2024); and ii) a decent dividend yield of c.6%.


Risks
i) Volatility in oil prices, refinery margins, and petrochemical prices; ii) changes in the energy policy by the government; and iii) regulatory risks semming from government intervention.