First Read PTT Oil and Retail Business: Q226 preview: Turning loss-making amid inventory and soft demand

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First Read PTT Oil and Retail Business: Q226 preview: Turning loss-making amid inventory and soft demand

formance of Cafe Amazon (likely 4-

12/25E 0.88 0.94

5% QoQ cups sold). Lifestyle EBITDA margin could soften slightly to around 30% due to

12/26E 0.85 0.88

higher marketing and promotional activities. 12/27E 0.84 0.99

Q326 to improve on normalized operations; policy risk remains Warayut Luangmettakul, CFA

AnalystLooking ahead, while we expect Q326 operations to improve QoQ as inventory-related

warayut.luangmettakul@ubs.com

losses normalize, underlying earnings performance could remain constrained by soft

+662-613 5753

fuel demand and policy intervention risks. Also, government intervention in domestic

retail fuel pricing may limit PTTOR's ability to manage marketing margins in a rising oil Alex Manoonpol

Analystprice environment, in our view.

alex.manoonpol@ubs.com

+662-613 5770

Valuation:

Permada Darmono

We maintain our Sell rating and Bt10.00 target price, reflecting near-term operating

Analyst

pressures and ongoing regulatory uncertainty. Over the longer term, while earnings permada.darmono@ubs.com

should recover from Q226's inventory-related losses, we remain cautious on the +65-6495 3137

medium-term outlook due to regulatory intervention risks, intensifying competition in

fuel retailing, and structural peak oil demand concerns.

Highlights (Btm) 12/22 12/23 12/24 12/25E 12/26E 12/27E 12/28E 12/29E

Revenues 789,785 769,741 723,958 588,546 582,237 624,429 666,824 669,379

EBIT (UBS) 12,869 13,340 10,365 13,794 13,339 13,187 12,997 12,843

Net earnings (UBS) 9,725 10,275 7,588 10,619 10,253 10,131 9,979 9,854

EPS (UBS, diluted) (Bt) 0.81 0.86 0.63 0.88 0.85 0.84 0.83 0.82

DPS (net) (Bt) 0.54 0.40 0.54 0.49 0.56 0.55 0.54 0.53