PTT’s Performance Outlook Hinges on Global Market Conditions
According to Tanapon Prapapan, Investor Relations Manager at PTT Public Company Limited, the company’s performance in the second half of this year will be heavily influenced by fluctuations in global product prices. PTT anticipates that crude oil prices will experience a slight decline, with the average price projected to settle in the range of $63-$73 per barrel. Simultaneously, the petrochemical segment is expected to continue facing pressure due to an influx of new supply into the market. Despite these headwinds, PTT maintains a positive outlook, anticipating that if crude oil prices remain stable relative to the first half of the year, the company could see lower or even no stock losses in the second half of 2025. In its gas business, the company forecasts a positive outlook for the second half, even with an expected seasonal drop in sales volume. This is because gas costs are projected to ease, following a downward trend in liquefied natural gas (LNG) prices. Furthermore, a planned reduction in maintenance shutdowns is expected to boost production at gas separation plants in the fourth quarter of 2025, contributing to improved operational efficiency and overall performance.
Navigating Market Volatility and Strategic Business Adjustments
Analysts at Krungsri Securities believe that PTT’s normalized profit in the third quarter of 2025 is poised for a recovery. This optimism is based on the expectation that less volatile crude oil prices will prevent significant stock losses in the company’s refining and petrochemical businesses. The analysts also forecast that refining margins and petrochemical spreads will improve compared to the same period last year, primarily due to tighter supply in the market. This improvement is expected to help offset any decrease in performance from the gas business, which has seen lower demand from power plant customers. However, compared to the previous quarter, profits across PTT’s gas supply, pipelines, and separation units remain under pressure from declining demand from power plant customers and falling sales prices. In a strategic corporate move, PTT recently restructured its stake in Horizon Plus Company Limited, a joint venture focused on electric vehicle production. PTT’s subsidiary, Arun Plus, reduced its holding from 60% to 40%, as PTT Group determined it lacked the necessary expertise in the electric vehicle business and opted to allow its partner to take a more dominant role in the venture.
Investor Recommendations and Long-Term Outlook
In light of the company’s mixed but generally stable outlook, analysts at Krungsri Securities have maintained a “Neutral” recommendation for PTT stock, with a year-end 2025 target price of THB 32.50 per share. Their advice to investors is to hold onto their shares for the time being, primarily to capitalize on the attractive dividend yields of approximately 6% while awaiting further clarity on planned long-term gas pricing structure adjustments. In the short term, the analysts do not foresee any major catalysts for the stock, with most of the company’s non-core asset divestments in the third quarter of 2025 expected to be non-cash transactions. Looking further ahead, the overall profit growth for PTT is forecasted to remain stable in both 2025 and 2026, with an average growth rate of around 2%. This stable, albeit modest, growth projection suggests that while the company is not expected to see a dramatic surge in profitability, it remains a sound and reliable investment for those seeking steady returns and consistent dividends over the long term, making it a compelling option for a stable, long-term portfolio.
