PTT Exploration and Production - Global Alliance Partners
PTT Exploration and Production Underperform (15E TP Bt122.00)
Company Update
Close Bt106.50
Energy
Earnings upgrade/Earnings downgrade/Overview unchanged
January 16, 2015
Downward revision down the road
Lack of positive catalysts We cut PTTEP’s 2015E TP and 2014‐16E earnings estimates to reflect a huge impairment loss in 4Q14E, as well as the downward revision on the Dubai price assumption in 2015‐16E. Although its share price is currently trading in the lower bound zone at 1x 2015E PBV (‐2.0SD), the oil surplus leading to a sustained low oil price at least in 1H15E and the reemerging concerns on the company’s uneconomic return on overseas investment cause us to maintain our “Underperform” rating for PTTEP, with a newly‐revised 2015E TP of Bt122.
FY14
FY15
Consensus EPS (Bt)
14.475
11.897
KT ZMICO vs. consensus Share data
‐61.8%
‐35.8%
Reuters / Bloomberg
PTTEP.BK/PTTEP TB
Paid‐up Shares (m)
Another cut in Dubai price assumption
3,969.99
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
423.00/12,916.00
Foreign limit / actual (%)
40.00/20.73
52 week High / Low (Bt)
172.50/99.75
Avg. daily T/O (shares 000) NVDR (%)
5,702.00 4.35
Estimated free float (%)
34.68
Beta
1.30
URL
www.pttep.com
CGR
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
We made another cut in our Dubai price assumption to US$50/bbl in 2015E and US$65/bbl in 2016E, as a result of the overwhelming oil surplus sending oil prices to a five‐year low. Expect 4Q14E earnings to deliver first net loss Given the expected huge impairment loss amounting to US$1bn (on the Montara project and the Mariana Oil Sands project) along with the lower average selling price (with 30% liquid volume linked to the sharp drop in the oil price) and higher costs led by write‐off expenses/SG&A expenses/tax expenses to more than offset the record‐high sales volume and hedging gain, we expect PTTEP to deliver its first net loss of Bt24bn in 4Q14E. Downward revision on 2015‐16E earnings Given our downward revision to the Dubai price assumption to US$50/bbl in 2015E and to US$65/bbl in 2016E (vs. US$70/bbl and US$75/bbl earlier), we slash our 2015‐16E NP by 35% to Bt30.3bn and by 24% to Bt38.5bn, respectively. We also revise down the 2015E DCF‐ based TP to Bt122/share (vs. Bt142/share earlier). Financial and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2012 212,537 57,316 17.08 26.7% 5.80 82.65 2012 6.24 3.13 1.29 5.4% 21.7% 13.8%
2013 224,973 56,155 14.07 ‐17.6% 5.66 96.86 2013 7.57 3.01 1.10 5.3% 15.8% 14.2%
2014E 245,402 21,791 5.53 ‐60.7% 3.50 107.02 2014E 19.27 2.91 1.00 3.3% 5.4% 15.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 9
2015E 198,771 30,313 7.64 38.2% 3.50 111.16 2015E 13.95 3.68 0.96 3.3% 7.0% 12.8%
2016E 215,407 38,502 9.70 27.0% 3.69 117.17 2016E 10.98 3.27 0.91 3.5% 8.5% 10.3%
Another cut in Dubai price assumption We made another cut in our Dubai price assumption to US$50/bbl in 2015E and US$65/bbl in 2016E (vs. our first cut in Dec‐2014 to US$70/bbl for 2015E and US$75/bbl for 2016E). The overwhelming oil surplus is the main negative pressure sending oil prices to a five‐year low, with the Dubai crude price hovering at the low US$40s level currently. The oil surplus is estimated at 1.8mbd, driven by 1) accelerated U.S. oil pumping following the increased oil extraction at shale formations; 2) OPEC resisting the call to cut production; and 3) Russia’s record‐high oil production. This is likely to keep oil prices at the low US$40s level in 1H15E, deterring investment in new supplies. There have been initial signals of a slowdown in U.S. drilling activity in Jan‐2015 (with lower rig counts in the month); however, it will probably take months for this to translate into lower new supplies. Given the expected slowdown in new supplies and a demand‐led recovery in 2H15E, we expect to see oil prices bounce back in 2H15E. Impairment loss (non‐cash item) on oil fields With the overwhelming oil surplus sending oil prices to a bear market, the de‐based oil price will lead to possible impairment losses for E&P players on their oil fields. We expect PTTEP to make a test on an impairment loss across the board on its oil fields, with a possible impairment loss to be done on the two major projects, namely the Montara project (the short‐lived oil field) in Australia and the Mariana Oil Sands project in Canada, for the expected amount of US$1bn. Meanwhile, its Rovuma Offshore Area 1 project, the LNG (liquefied natural gas) project in Mozambique, is unlikely to mark any impairment loss as the forward LNG price of US$11‐12/mmbtu still makes the project viable. Amidst the unfavorable oil price environment, the company has delayed the Final Investment Decision (FID) on new projects, including the Mariana Oil Sands project (to 2017E), the Mozambique Offshore Area 1 project (late 2015E‐early 2016E), the Ubon project (late 2015E), and the Myanmar M3 project (2016E). This gives the company room for investment flexibility in terms of postponing expenditures if the projects are determined to be uneconomic. Thus, the company’s capital expenditures (CAPEX) in 2017‐19E are subject to change depending on whether the new projects with back‐end loaded expenditures are sanctioned.
Figure 1: PTTEP’s five‐year investment expenditures New forecasts unit : US$mn Capital Expenditures Operating Expenditures Acquisition (M&A) Total Expenditures By activities Exploration Development Operation Corporate & others
2014E
2015E
2016E
2017E
2018E
2019E
Total 2015-19E
2,936 1,587 1,199 5,722
3,071 1,761
3,437 1,767
3,833 1,660
3,110 1,648
2,411 1,597
4,832
5,204
5,493
4,758
4,008
15,862 8,433 24,295
14% 52% 24% 10%
14% 52% 23% 11%
10% 59% 21% 10%
10% 60% 21% 9%
6% 60% 24% 10%
2% 58% 28% 12%
Source: Company
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 9
Expect 4Q14E earnings to deliver the first loss, largely due to huge impairment loss Given the expected huge impairment loss amounting to US$1bn (on the Montara project and the Mariana Oil Sands project) along with the lower average selling price (with 30% liquid volume linked to the sharp drop in the oil price) and higher costs led by write‐off expenses/SG&A expenses/tax expenses to more than offset the record‐high sales volume and hedging gain, we expect PTTEP to deliver its first net loss of Bt24bn in 4Q14E. Its operation line in 4Q14E should be hurt by 1) a lower average selling price (ASP) to US$55.2/boe (‐14% YoY, ‐15% QoQ), with the sharp drop in the oil price as the main factor; 2) the expected high costs driven by write‐off expenses on 10 dry wells (totaling US$100mn), as well as high depreciation costs following the larger Montara oil contribution and high seasonal SG&A expenses; and 3) higher tax expenses amounting to US$50mn, mainly linked to deferred tax from functional currency. These negative factors should more than offset the record‐high sales volume at 349 kboe/d in 4Q14E (+16% YoY, +7% QoQ), driven by the full‐quarter gas contribution from the Zawtika project (~310mmscfd in 4Q14E vs. 200mmscfd in 3Q14) and the higher Montara oil contribution (23,000 bbl/d in 4Q14E vs. 17,000 bbl/d in 3Q14). Moreover, there should be more non‐core negative items in 4Q14E, including the expected US$1bn impairment loss on the Montara project and the Mariana Oil Sands project, as well as the expected forex loss of US$30mn, against the only non‐core positive from the expected US$140mn hedging gain (on its hedging position of 8mn bbl following the drop in the crude price below the floor price hedged under “zero cost collar”). This should result in its 4Q14E earnings turning to a Bt24bn net loss (vs. net profit of Bt7.4bn in 4Q13 and net profit of Bt15.3bn in 3Q14). Given the expected poor earnings in 4Q14E with the huge impairment loss of US$1bn, we cut our 2014E NP by 61% to Bt21.8bn. Stripping out the non‐core items, we expect the company to deliver a Bt50.4bn core profit, ‐11% from the earlier forecast given the higher unit cost (to US$42/boe vs. US$40/boe earlier) and the slight fine‐tuning of the projected petroleum sales volume to the average of 322 kboe/d (+2% from earlier) and ASP to US$63/boe (‐3% from earlier). Figure 2: PTTEP’s 4Q14E and 2014E earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gn (ls) & hedging gn (ls) on financial derivatives Extraordinary Items Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt/equity (x) BVPS (Bt) ROE (%)
4Q13 58,791 35,196 38,729 (1,955) 754 (14,009)
3Q14 64,021 33,015 45,160 (2,003) 773 (8,601)
4Q14E 57,933 23,820 34,717 (1,939) 500 (5,518)
% YoY (1.5) (32.3) (10.4) (0.8) (33.7) (60.6)
% QoQ (9.5) (27.9) (23.1) (3.2) (35.3) (35.8)
(2,411)
1,260
3,594
nm
185.3
857 32 7,412 9,463 1.85 59.87 65.88 12.61 1.56 12.35 0.34 96.86 7.95
‐ 52 15,284 14,024 3.84 51.57 70.54 23.87 1.98 11.89 0.32 108.60 14.20
(32,882) 30 (24,114) 5,173 (6.07) 41.12 59.93 (41.62) 1.62 6.24 0.36 107.02 (23.02)
nm (5.1) (425.3) (45.3) (428.3)
nm (41.8) (257.8) (63.1) (258.2)
2013 224,973 143,780 158,517 (6,175) 2,911 (46,712)
2014E 245,402 125,323 167,048 (7,681) 3,974 (32,884)
% YoY 9.1 (12.8) 5.4 24.4 36.5 (29.6)
(3,083) 857 190 56,155 58,878 14.07 63.91 70.46 24.96 1.56 17.52 0.34 96.86 15.76
4,167 (32,622) 114 21,791 50,397 5.53 51.07 68.07 8.88 1.62 11.29 0.36 107.02 5.38
nm nm (40.2) (61.2) (14.4) (60.7)
Source: KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 9
Figure 3: PTTEP’s quarterly operational data
A) PTTEP’s quarterly petroleum sales volume
B) PTTEP’s quarterly ASP and gross profit margin
Source: KT ZMICO Research Note: ASP – average selling price of petroleum (excluding revenue from gas pipeline transportation) Downward revision on 2015‐16E earnings Given the downward revision made to the Dubai price assumption to US$50/bbl in 2015E and to US$65/bbl in 2016E (vs. US$70/bbl and US$75/bbl earlier), we slash our 2015‐16E NP by 35% to Bt30.3bn and by 24% to Bt38.5bn, respectively. We also revise down the 2015E DCF‐based TP to Bt122/share (vs. Bt142/share earlier).
Our newly‐revised earnings projection calls for the company to record five‐year low NP of Bt21.8bn in 2014E, largely due to the de‐based oil price resulting in a huge impairment loss on assets in the year (non‐cash item). Given the low base earnings in 2014E, our 2015‐16E NP forecasts are likely to see improvement with projected 33% CAGR to Bt30.3bn and Bt38.5bn, respectively. Larger petroleum sales volume should be the main driver in 2015E amidst the unfavorable oil price (note that we expect sales volume to grow 6% YoY to 343 kboe/d, due to the full‐year volume contribution from the Zawtika project and the full‐year volume contribution after the acquisition of Hess’s Thailand assets). Meanwhile, higher ASP should be the main growth catalyst in 2016E against the zero growth in sales volume (note that we expect an improving ASP by 11% YoY to US$53/boe following a more favorable oil price in the year). REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 9
Figure 4: Our key assumptions and earnings forecasts for PTTEP in 2014‐16E Petroleum sales volume (boe/d) Dubai (US$/bbl) Average selling price (US$/boe) Unit cost (US$/boe) Sales (Btmn) EBITDA (Btmn) Core profit (Btmn) Net profit (Btmn) EPS (Bt) % growth in core profit % growth in NP 2015E DCF‐based TP
New 2014E 2015E 2016E 322,195 342,925 342,141 97 50 65 63 48 53 42 37 38 245,402 198,771 215,407 167,048 130,373 143,929 50,397 27,304 37,760 21,791 30,313 38,502 5.53 7.64 9.70 (14.40) (45.82) 38.29 (61.19) 39.11 27.01 122
Old 2014E 315,772 97 65 40 251,088 174,483 56,938 56,128 14.14 (3.30) (0.05)
% chg from old 2015E 2016E 2014E 2015E 2016E 342,925 342,141 2.0 0.0 0.0 70 75 0.2 ‐28.6 ‐13.3 56 57 ‐3.3 ‐14.7 ‐7.5 37 37 6.5 ‐0.3 2.9 232,223 232,677 ‐2.3 ‐14.4 ‐7.4 160,215 160,596 ‐4.3 ‐18.6 ‐10.4 46,530 49,724 ‐11.5 ‐41.3 ‐24.1 46,530 50,467 ‐61.2 ‐34.9 ‐23.7 11.72 12.7 ‐60.9 ‐34.9 ‐23.7 (18.28) 6.87 (17.10) 8.46 142 ‐14.1
Source: KT ZMICO Research
Sensitivity analysis on the rolling low of oil prices Our sensitivity study suggests that every US$10/bbl change in the Dubai assumption would be a source of downside risk to its earnings by Bt6.5bn a year (‐17% to ‐22%) and to its 2015E TP by Bt11. Given the rolling low of the Dubai crude assumption to US$40/bbl flat (vs. our base case of US$50/bbl in 2015E and US$65/bbl in 2016E), our study suggests a low‐case TP of Bt88/share. Note that PTTEP’s current market price nearly implies a flat US$45/bbl level. Figure 5: Sensitivity study of changes in oil price and the possible impact to earnings and TPs PTTEP
base case (US$50/bbl in 15E, US$65 in 16E) low case of US$40/bbl flat % downside risk
2015E NP (Btmn) 30,313 23,777 ‐22%
2016E NP (Btmn) 38,502 20,071 ‐48%
15E TP (Bt) 122 88
downside risk (Bt/share) (34)
Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 9
Figure 6: PTTEP’s PBV band and its correlation to oil prices A) PTTEP’s PBV band
Source: Bloomberg, KT ZMICO Research
B) PTTEP share price in correlation to the crude oil price
Source: Bloomberg, KT ZMICO Research
Figure 7: PTTEP’s valuation comparison with regional peers
A) PTTEP’s 2015E PBV and ROE comparison with regional peers
B) PTTEP’s 2015E PBV/ROE comparison with regional peers
Source: Bloomberg, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 6 of 9
Figure 8: PTTEP’s valuation comparison with regional peers NAME
PETROCHINA CO LTD‐H SINOPEC SHANGHAI PETROCHEM‐H CHINA CITIC RESOURCES HOLDINGS LTD CNOOC LTD HONG KONG BHARAT PETROLEUM CORP LTD HINDUSTAN PETROLEUM CORP INDIAN OIL CORP LTD OIL & NATURAL GAS CORP LTD RELIANCE INDUSTRIES LTD INDIA HANWHA CHEMICAL CORP LG CHEM LTD SK INNOVATION CO LTD LOTTE CHEMICAL CORP S. KOREA FORMOSA PLASTICS CORP NAN YA PLASTICS CORP FAR EASTERN NEW CENTURY CORP TAIWAN PTT PCL PTT EXPLOR & PROD PUBLIC CO THAILAND AVERAGE
PER (x)
Mkt Cap (US$Mn)
14E
15E
433,576 7,665 1,045 60,239 7,735 3,150 13,136 47,877 45,089 1,689 10,920 7,059 4,683 14,838 16,062 5,141 27,807 12,903
10.6 31.8 21.2 49.0 7.1 28.1 14.2 12.1 12.4 10.1 11.0 12.0 23.5 12.6 n.a. 19.0 18.4 19.6 16.8 16.2 17.5 10.3 19.3 14.8 18.7
12.8 14.9 13.8 11.1 9.2 10.1 12.0 9.5 9.5 8.7 10.1 10.0 14.0 9.8 9.9 11.3 11.3 17.0 15.2 16.2 16.2 9.1 13.9 11.5 12.1
PBV (x) 14E 15E
1.3 1.4 1.4 0.7 1.2 1.0 2.2 1.3 1.1 1.6 1.2 1.5 0.4 1.0 0.5 0.8 0.7 1.7 1.6 0.9 1.4 1.2 1.0 1.1 1.2
1.3 1.3 1.3 0.6 1.2 0.9 2.0 1.2 1.0 1.4 1.1 1.3 0.4 1.0 0.5 0.7 0.7 1.6 1.6 0.8 1.3 1.1 1.0 1.0 1.1
EV/EBITDA (x) 14E 15E
7.5 15.6 11.5 22.9 3.0 12.9 9.4 9.7 9.4 5.0 8.6 8.4 11.3 5.3 17.3 7.5 10.4 28.2 17.6 11.1 18.9 4.9 2.9 3.9 11.0
7.6 11.5 9.5 7.9 3.1 5.5 8.4 8.8 7.7 4.5 7.5 7.4 10.0 4.7 8.9 5.9 7.4 26.4 15.4 11.2 17.7 4.8 3.7 4.2 8.6
YLD (%) 14E 15E
3.4 1.1 2.3 ‐ 3.8 3.8 2.3 2.7 2.5 3.2 1.2 2.4 1.8 2.3 3.3 0.7 2.0 3.3 4.0 4.3 3.9 3.4 3.3 3.3 2.9
3.0 1.4 2.2 ‐ 3.0 3.0 2.5 3.3 3.2 3.6 1.3 2.8 2.1 2.3 3.7 0.8 2.2 3.6 4.3 4.5 4.1 3.9 3.3 3.6 3.0
Source: Bloomberg, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 7 of 9
ROE (%) 14E 15E
10.3 3.1 6.7 1.4 14.9 8.1 16.2 11.0 9.4 16.2 11.9 12.9 1.8 8.4 (0.0) 4.2 3.6 9.3 9.8 4.7 7.9 12.4 5.4 8.9 8.0
8.6 7.1 7.8 6.0 11.0 8.5 16.9 12.9 11.1 16.8 11.7 13.9 3.1 10.3 4.9 6.7 6.2 9.6 9.9 4.8 8.1 12.8 7.0 9.9 9.1
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btm) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btm) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2012 212,537 (71,219) 141,318 (34,319) 149,691 42,692 106,999 (5,812) 2,742 103,928 (42,120) (1,112) (3,525) 145 57,316 17.08 17.08 63,601 16.02 5.80
2013 224,973 (81,193) 143,780 (35,614) 158,517 50,351 108,166 (6,175) 2,911 104,902 (46,712) (3,083) 857 190 56,155 14.07 14.07 58,878 14.83 5.66
2012 70,205 31,876 9,916 336,058 153,458 601,513 5,010 110,562 273,409 3,970 328,104 601,513
2013 77,348 34,336 12,246 415,809 168,130 707,868 11,699 120,310 323,331 3,970 384,536 707,868
2012 57,316 1,112 42,692 (9,427) 91,693 (84,128)
2013 56,155 3,083 50,351 2,661 112,250 (130,371)
(84,128) (7,173) 90,372 (19,463) (43,896) 19,840 27,405 7,565 1.91
(130,371) 16,437 22,929 (22,462) 8,359 25,263 7,142 (18,121) (4.56)
2012 25.3 28.8 26.7 66.5 70.4 50.3 27.0 29.9 40.5
2013 5.9 5.9 (17.6) 63.9 70.5 48.1 25.0 26.2 44.5
2014E 245,402 (120,079) 125,323 (38,599) 167,048 80,324 86,724 (7,681) 3,974 83,017 (32,884) 4,167 (32,622) 114 21,791 5.53 5.53 50,397 12.69 3.50 2014E 87,455 23,532 13,159 467,634 170,878 762,658 11,700 139,350 337,790 3,970 424,868 762,658 2014E 21,791 (4,167) 80,324 6,368 104,316 (132,148) (132,148) 19,042 32,550 (13,895) 243 37,940 10,108 (27,832) (7.01) 2014E 9.1 5.4 (60.7) 51.1 68.1 35.3 8.9 20.5 39.6
2015E 198,771 (117,184) 81,587 (32,750) 130,373 81,536 48,837 (7,080) 3,500 45,257 (18,103) 0 3,009 150 30,313 7.64 7.64 27,304 6.88 3.50 2015E 85,270 19,060 12,842 484,905 165,564 767,641 45,457 96,288 326,343 3,970 441,298 767,641 2015E 30,313 0 81,536 2,298 114,148 (98,808) (98,808) (9,305) 150 (13,884) 5,513 (17,525) (2,185) 15,340 3.86 2015E (19.0) (22.0) 38.2 41.0 65.6 24.6 15.3 13.7 40.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 8 of 9
2016E 215,407 (115,531) 99,876 (35,517) 143,929 79,570 64,359 (5,176) 3,500 62,683 (25,073) 743 0 150 38,502 9.70 9.70 37,760 9.51 3.69 2016E 89,534 20,655 12,661 500,719 160,556 784,125 41,832 95,500 318,955 3,970 465,170 784,125 2016E 38,502 (743) 79,570 (3,814) 113,516 (95,384) (95,384) (4,413) 150 (14,631) 5,025 (13,869) 4,264 18,132 4.57 2016E 8.4 10.4 27.0 46.4 66.8 29.9 17.9 17.5 40.0
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market return over six months period because of specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to below market return over six months period because of specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
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KT•ZMICO Securities Company Limited
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8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
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1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
Company Update
Close Bt106.50
Energy
Earnings upgrade/Earnings downgrade/Overview unchanged
January 16, 2015
Downward revision down the road
Lack of positive catalysts We cut PTTEP’s 2015E TP and 2014‐16E earnings estimates to reflect a huge impairment loss in 4Q14E, as well as the downward revision on the Dubai price assumption in 2015‐16E. Although its share price is currently trading in the lower bound zone at 1x 2015E PBV (‐2.0SD), the oil surplus leading to a sustained low oil price at least in 1H15E and the reemerging concerns on the company’s uneconomic return on overseas investment cause us to maintain our “Underperform” rating for PTTEP, with a newly‐revised 2015E TP of Bt122.
FY14
FY15
Consensus EPS (Bt)
14.475
11.897
KT ZMICO vs. consensus Share data
‐61.8%
‐35.8%
Reuters / Bloomberg
PTTEP.BK/PTTEP TB
Paid‐up Shares (m)
Another cut in Dubai price assumption
3,969.99
Par (Bt)
1.00
Market cap (Bt bn / US$ m)
423.00/12,916.00
Foreign limit / actual (%)
40.00/20.73
52 week High / Low (Bt)
172.50/99.75
Avg. daily T/O (shares 000) NVDR (%)
5,702.00 4.35
Estimated free float (%)
34.68
Beta
1.30
URL
www.pttep.com
CGR
Patcharin Karsemarnuntana Analyst, no 17834 [email protected] 66 (0) 2695‐5837
We made another cut in our Dubai price assumption to US$50/bbl in 2015E and US$65/bbl in 2016E, as a result of the overwhelming oil surplus sending oil prices to a five‐year low. Expect 4Q14E earnings to deliver first net loss Given the expected huge impairment loss amounting to US$1bn (on the Montara project and the Mariana Oil Sands project) along with the lower average selling price (with 30% liquid volume linked to the sharp drop in the oil price) and higher costs led by write‐off expenses/SG&A expenses/tax expenses to more than offset the record‐high sales volume and hedging gain, we expect PTTEP to deliver its first net loss of Bt24bn in 4Q14E. Downward revision on 2015‐16E earnings Given our downward revision to the Dubai price assumption to US$50/bbl in 2015E and to US$65/bbl in 2016E (vs. US$70/bbl and US$75/bbl earlier), we slash our 2015‐16E NP by 35% to Bt30.3bn and by 24% to Bt38.5bn, respectively. We also revise down the 2015E DCF‐ based TP to Bt122/share (vs. Bt142/share earlier). Financial and Valuation FY Ended 31 Dec Revenues (Btmn) Net profit (Btmn) EPS (Bt) EPS growth (%) Dividend (Bt) BV (Bt) FY Ended 31 Dec PER (x) EV/EBITDA (x) PBV (x) Dividend yield (%) ROE (%) Net gearing (%)
2012 212,537 57,316 17.08 26.7% 5.80 82.65 2012 6.24 3.13 1.29 5.4% 21.7% 13.8%
2013 224,973 56,155 14.07 ‐17.6% 5.66 96.86 2013 7.57 3.01 1.10 5.3% 15.8% 14.2%
2014E 245,402 21,791 5.53 ‐60.7% 3.50 107.02 2014E 19.27 2.91 1.00 3.3% 5.4% 15.0%
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 1 of 9
2015E 198,771 30,313 7.64 38.2% 3.50 111.16 2015E 13.95 3.68 0.96 3.3% 7.0% 12.8%
2016E 215,407 38,502 9.70 27.0% 3.69 117.17 2016E 10.98 3.27 0.91 3.5% 8.5% 10.3%
Another cut in Dubai price assumption We made another cut in our Dubai price assumption to US$50/bbl in 2015E and US$65/bbl in 2016E (vs. our first cut in Dec‐2014 to US$70/bbl for 2015E and US$75/bbl for 2016E). The overwhelming oil surplus is the main negative pressure sending oil prices to a five‐year low, with the Dubai crude price hovering at the low US$40s level currently. The oil surplus is estimated at 1.8mbd, driven by 1) accelerated U.S. oil pumping following the increased oil extraction at shale formations; 2) OPEC resisting the call to cut production; and 3) Russia’s record‐high oil production. This is likely to keep oil prices at the low US$40s level in 1H15E, deterring investment in new supplies. There have been initial signals of a slowdown in U.S. drilling activity in Jan‐2015 (with lower rig counts in the month); however, it will probably take months for this to translate into lower new supplies. Given the expected slowdown in new supplies and a demand‐led recovery in 2H15E, we expect to see oil prices bounce back in 2H15E. Impairment loss (non‐cash item) on oil fields With the overwhelming oil surplus sending oil prices to a bear market, the de‐based oil price will lead to possible impairment losses for E&P players on their oil fields. We expect PTTEP to make a test on an impairment loss across the board on its oil fields, with a possible impairment loss to be done on the two major projects, namely the Montara project (the short‐lived oil field) in Australia and the Mariana Oil Sands project in Canada, for the expected amount of US$1bn. Meanwhile, its Rovuma Offshore Area 1 project, the LNG (liquefied natural gas) project in Mozambique, is unlikely to mark any impairment loss as the forward LNG price of US$11‐12/mmbtu still makes the project viable. Amidst the unfavorable oil price environment, the company has delayed the Final Investment Decision (FID) on new projects, including the Mariana Oil Sands project (to 2017E), the Mozambique Offshore Area 1 project (late 2015E‐early 2016E), the Ubon project (late 2015E), and the Myanmar M3 project (2016E). This gives the company room for investment flexibility in terms of postponing expenditures if the projects are determined to be uneconomic. Thus, the company’s capital expenditures (CAPEX) in 2017‐19E are subject to change depending on whether the new projects with back‐end loaded expenditures are sanctioned.
Figure 1: PTTEP’s five‐year investment expenditures New forecasts unit : US$mn Capital Expenditures Operating Expenditures Acquisition (M&A) Total Expenditures By activities Exploration Development Operation Corporate & others
2014E
2015E
2016E
2017E
2018E
2019E
Total 2015-19E
2,936 1,587 1,199 5,722
3,071 1,761
3,437 1,767
3,833 1,660
3,110 1,648
2,411 1,597
4,832
5,204
5,493
4,758
4,008
15,862 8,433 24,295
14% 52% 24% 10%
14% 52% 23% 11%
10% 59% 21% 10%
10% 60% 21% 9%
6% 60% 24% 10%
2% 58% 28% 12%
Source: Company
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 2 of 9
Expect 4Q14E earnings to deliver the first loss, largely due to huge impairment loss Given the expected huge impairment loss amounting to US$1bn (on the Montara project and the Mariana Oil Sands project) along with the lower average selling price (with 30% liquid volume linked to the sharp drop in the oil price) and higher costs led by write‐off expenses/SG&A expenses/tax expenses to more than offset the record‐high sales volume and hedging gain, we expect PTTEP to deliver its first net loss of Bt24bn in 4Q14E. Its operation line in 4Q14E should be hurt by 1) a lower average selling price (ASP) to US$55.2/boe (‐14% YoY, ‐15% QoQ), with the sharp drop in the oil price as the main factor; 2) the expected high costs driven by write‐off expenses on 10 dry wells (totaling US$100mn), as well as high depreciation costs following the larger Montara oil contribution and high seasonal SG&A expenses; and 3) higher tax expenses amounting to US$50mn, mainly linked to deferred tax from functional currency. These negative factors should more than offset the record‐high sales volume at 349 kboe/d in 4Q14E (+16% YoY, +7% QoQ), driven by the full‐quarter gas contribution from the Zawtika project (~310mmscfd in 4Q14E vs. 200mmscfd in 3Q14) and the higher Montara oil contribution (23,000 bbl/d in 4Q14E vs. 17,000 bbl/d in 3Q14). Moreover, there should be more non‐core negative items in 4Q14E, including the expected US$1bn impairment loss on the Montara project and the Mariana Oil Sands project, as well as the expected forex loss of US$30mn, against the only non‐core positive from the expected US$140mn hedging gain (on its hedging position of 8mn bbl following the drop in the crude price below the floor price hedged under “zero cost collar”). This should result in its 4Q14E earnings turning to a Bt24bn net loss (vs. net profit of Bt7.4bn in 4Q13 and net profit of Bt15.3bn in 3Q14). Given the expected poor earnings in 4Q14E with the huge impairment loss of US$1bn, we cut our 2014E NP by 61% to Bt21.8bn. Stripping out the non‐core items, we expect the company to deliver a Bt50.4bn core profit, ‐11% from the earlier forecast given the higher unit cost (to US$42/boe vs. US$40/boe earlier) and the slight fine‐tuning of the projected petroleum sales volume to the average of 322 kboe/d (+2% from earlier) and ASP to US$63/boe (‐3% from earlier). Figure 2: PTTEP’s 4Q14E and 2014E earnings preview Profit and Loss (Btmn) Year‐end 31 Dec Revenue Gross profit EBITDA Interest expense Other income Income tax Forex gn (ls) & hedging gn (ls) on financial derivatives Extraordinary Items Gn (Ls) from affiliates Net profit (loss) Core profit (loss) Reported EPS (Bt) Gross margin (%) EBITDA margin (%) Net margin (%) Current ratio (x) Interest coverage (x) Debt/equity (x) BVPS (Bt) ROE (%)
4Q13 58,791 35,196 38,729 (1,955) 754 (14,009)
3Q14 64,021 33,015 45,160 (2,003) 773 (8,601)
4Q14E 57,933 23,820 34,717 (1,939) 500 (5,518)
% YoY (1.5) (32.3) (10.4) (0.8) (33.7) (60.6)
% QoQ (9.5) (27.9) (23.1) (3.2) (35.3) (35.8)
(2,411)
1,260
3,594
nm
185.3
857 32 7,412 9,463 1.85 59.87 65.88 12.61 1.56 12.35 0.34 96.86 7.95
‐ 52 15,284 14,024 3.84 51.57 70.54 23.87 1.98 11.89 0.32 108.60 14.20
(32,882) 30 (24,114) 5,173 (6.07) 41.12 59.93 (41.62) 1.62 6.24 0.36 107.02 (23.02)
nm (5.1) (425.3) (45.3) (428.3)
nm (41.8) (257.8) (63.1) (258.2)
2013 224,973 143,780 158,517 (6,175) 2,911 (46,712)
2014E 245,402 125,323 167,048 (7,681) 3,974 (32,884)
% YoY 9.1 (12.8) 5.4 24.4 36.5 (29.6)
(3,083) 857 190 56,155 58,878 14.07 63.91 70.46 24.96 1.56 17.52 0.34 96.86 15.76
4,167 (32,622) 114 21,791 50,397 5.53 51.07 68.07 8.88 1.62 11.29 0.36 107.02 5.38
nm nm (40.2) (61.2) (14.4) (60.7)
Source: KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 3 of 9
Figure 3: PTTEP’s quarterly operational data
A) PTTEP’s quarterly petroleum sales volume
B) PTTEP’s quarterly ASP and gross profit margin
Source: KT ZMICO Research Note: ASP – average selling price of petroleum (excluding revenue from gas pipeline transportation) Downward revision on 2015‐16E earnings Given the downward revision made to the Dubai price assumption to US$50/bbl in 2015E and to US$65/bbl in 2016E (vs. US$70/bbl and US$75/bbl earlier), we slash our 2015‐16E NP by 35% to Bt30.3bn and by 24% to Bt38.5bn, respectively. We also revise down the 2015E DCF‐based TP to Bt122/share (vs. Bt142/share earlier).
Our newly‐revised earnings projection calls for the company to record five‐year low NP of Bt21.8bn in 2014E, largely due to the de‐based oil price resulting in a huge impairment loss on assets in the year (non‐cash item). Given the low base earnings in 2014E, our 2015‐16E NP forecasts are likely to see improvement with projected 33% CAGR to Bt30.3bn and Bt38.5bn, respectively. Larger petroleum sales volume should be the main driver in 2015E amidst the unfavorable oil price (note that we expect sales volume to grow 6% YoY to 343 kboe/d, due to the full‐year volume contribution from the Zawtika project and the full‐year volume contribution after the acquisition of Hess’s Thailand assets). Meanwhile, higher ASP should be the main growth catalyst in 2016E against the zero growth in sales volume (note that we expect an improving ASP by 11% YoY to US$53/boe following a more favorable oil price in the year). REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 4 of 9
Figure 4: Our key assumptions and earnings forecasts for PTTEP in 2014‐16E Petroleum sales volume (boe/d) Dubai (US$/bbl) Average selling price (US$/boe) Unit cost (US$/boe) Sales (Btmn) EBITDA (Btmn) Core profit (Btmn) Net profit (Btmn) EPS (Bt) % growth in core profit % growth in NP 2015E DCF‐based TP
New 2014E 2015E 2016E 322,195 342,925 342,141 97 50 65 63 48 53 42 37 38 245,402 198,771 215,407 167,048 130,373 143,929 50,397 27,304 37,760 21,791 30,313 38,502 5.53 7.64 9.70 (14.40) (45.82) 38.29 (61.19) 39.11 27.01 122
Old 2014E 315,772 97 65 40 251,088 174,483 56,938 56,128 14.14 (3.30) (0.05)
% chg from old 2015E 2016E 2014E 2015E 2016E 342,925 342,141 2.0 0.0 0.0 70 75 0.2 ‐28.6 ‐13.3 56 57 ‐3.3 ‐14.7 ‐7.5 37 37 6.5 ‐0.3 2.9 232,223 232,677 ‐2.3 ‐14.4 ‐7.4 160,215 160,596 ‐4.3 ‐18.6 ‐10.4 46,530 49,724 ‐11.5 ‐41.3 ‐24.1 46,530 50,467 ‐61.2 ‐34.9 ‐23.7 11.72 12.7 ‐60.9 ‐34.9 ‐23.7 (18.28) 6.87 (17.10) 8.46 142 ‐14.1
Source: KT ZMICO Research
Sensitivity analysis on the rolling low of oil prices Our sensitivity study suggests that every US$10/bbl change in the Dubai assumption would be a source of downside risk to its earnings by Bt6.5bn a year (‐17% to ‐22%) and to its 2015E TP by Bt11. Given the rolling low of the Dubai crude assumption to US$40/bbl flat (vs. our base case of US$50/bbl in 2015E and US$65/bbl in 2016E), our study suggests a low‐case TP of Bt88/share. Note that PTTEP’s current market price nearly implies a flat US$45/bbl level. Figure 5: Sensitivity study of changes in oil price and the possible impact to earnings and TPs PTTEP
base case (US$50/bbl in 15E, US$65 in 16E) low case of US$40/bbl flat % downside risk
2015E NP (Btmn) 30,313 23,777 ‐22%
2016E NP (Btmn) 38,502 20,071 ‐48%
15E TP (Bt) 122 88
downside risk (Bt/share) (34)
Source: KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 5 of 9
Figure 6: PTTEP’s PBV band and its correlation to oil prices A) PTTEP’s PBV band
Source: Bloomberg, KT ZMICO Research
B) PTTEP share price in correlation to the crude oil price
Source: Bloomberg, KT ZMICO Research
Figure 7: PTTEP’s valuation comparison with regional peers
A) PTTEP’s 2015E PBV and ROE comparison with regional peers
B) PTTEP’s 2015E PBV/ROE comparison with regional peers
Source: Bloomberg, KT ZMICO Research
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 6 of 9
Figure 8: PTTEP’s valuation comparison with regional peers NAME
PETROCHINA CO LTD‐H SINOPEC SHANGHAI PETROCHEM‐H CHINA CITIC RESOURCES HOLDINGS LTD CNOOC LTD HONG KONG BHARAT PETROLEUM CORP LTD HINDUSTAN PETROLEUM CORP INDIAN OIL CORP LTD OIL & NATURAL GAS CORP LTD RELIANCE INDUSTRIES LTD INDIA HANWHA CHEMICAL CORP LG CHEM LTD SK INNOVATION CO LTD LOTTE CHEMICAL CORP S. KOREA FORMOSA PLASTICS CORP NAN YA PLASTICS CORP FAR EASTERN NEW CENTURY CORP TAIWAN PTT PCL PTT EXPLOR & PROD PUBLIC CO THAILAND AVERAGE
PER (x)
Mkt Cap (US$Mn)
14E
15E
433,576 7,665 1,045 60,239 7,735 3,150 13,136 47,877 45,089 1,689 10,920 7,059 4,683 14,838 16,062 5,141 27,807 12,903
10.6 31.8 21.2 49.0 7.1 28.1 14.2 12.1 12.4 10.1 11.0 12.0 23.5 12.6 n.a. 19.0 18.4 19.6 16.8 16.2 17.5 10.3 19.3 14.8 18.7
12.8 14.9 13.8 11.1 9.2 10.1 12.0 9.5 9.5 8.7 10.1 10.0 14.0 9.8 9.9 11.3 11.3 17.0 15.2 16.2 16.2 9.1 13.9 11.5 12.1
PBV (x) 14E 15E
1.3 1.4 1.4 0.7 1.2 1.0 2.2 1.3 1.1 1.6 1.2 1.5 0.4 1.0 0.5 0.8 0.7 1.7 1.6 0.9 1.4 1.2 1.0 1.1 1.2
1.3 1.3 1.3 0.6 1.2 0.9 2.0 1.2 1.0 1.4 1.1 1.3 0.4 1.0 0.5 0.7 0.7 1.6 1.6 0.8 1.3 1.1 1.0 1.0 1.1
EV/EBITDA (x) 14E 15E
7.5 15.6 11.5 22.9 3.0 12.9 9.4 9.7 9.4 5.0 8.6 8.4 11.3 5.3 17.3 7.5 10.4 28.2 17.6 11.1 18.9 4.9 2.9 3.9 11.0
7.6 11.5 9.5 7.9 3.1 5.5 8.4 8.8 7.7 4.5 7.5 7.4 10.0 4.7 8.9 5.9 7.4 26.4 15.4 11.2 17.7 4.8 3.7 4.2 8.6
YLD (%) 14E 15E
3.4 1.1 2.3 ‐ 3.8 3.8 2.3 2.7 2.5 3.2 1.2 2.4 1.8 2.3 3.3 0.7 2.0 3.3 4.0 4.3 3.9 3.4 3.3 3.3 2.9
3.0 1.4 2.2 ‐ 3.0 3.0 2.5 3.3 3.2 3.6 1.3 2.8 2.1 2.3 3.7 0.8 2.2 3.6 4.3 4.5 4.1 3.9 3.3 3.6 3.0
Source: Bloomberg, KT ZMICO Research REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 7 of 9
ROE (%) 14E 15E
10.3 3.1 6.7 1.4 14.9 8.1 16.2 11.0 9.4 16.2 11.9 12.9 1.8 8.4 (0.0) 4.2 3.6 9.3 9.8 4.7 7.9 12.4 5.4 8.9 8.0
8.6 7.1 7.8 6.0 11.0 8.5 16.9 12.9 11.1 16.8 11.7 13.9 3.1 10.3 4.9 6.7 6.2 9.6 9.9 4.8 8.1 12.8 7.0 9.9 9.1
Financial tables PROFIT & LOSS (Btm) Revenues Cost of sales and service Gross profit SG&A EBITDA Depreciation & amortization EBIT Interest expense Other income / exp. EBT Corporate tax Forex gain (loss) Extra Items Gain (loss) from affiliates Net profit Reported EPS Fully diluted EPS Core net profit Core EPS Dividend (Bt) BALANCE SHEET (Btm) Cash and equivalents Accounts receivable Inventories PP&E‐net Other assets Total assets ST debt & current portion Long‐term debt Total liabilities Paid‐up shares Shareholder equity Total liab. & shareholder equity CASH FLOW (Btm) Net income Forex and other extraordinary adjustments Depreciation & amortization Change in working capital Cash flow from operations Capex (Invest)/Divest Others Cash flow from investing Debt financing (repayment) Equity financing Dividend payment Others Cash flow from financing Net change in cash Free cash flow FCF per share (Bt) PROFITABILITY Revenue growth (%) EBITDA growth (%) EPS growth (%) Gross margin (%) EBITDA margin (%) Operating margin (%) Net margin (%) Core profit margin (%) Effective tax rate (%)
2012 212,537 (71,219) 141,318 (34,319) 149,691 42,692 106,999 (5,812) 2,742 103,928 (42,120) (1,112) (3,525) 145 57,316 17.08 17.08 63,601 16.02 5.80
2013 224,973 (81,193) 143,780 (35,614) 158,517 50,351 108,166 (6,175) 2,911 104,902 (46,712) (3,083) 857 190 56,155 14.07 14.07 58,878 14.83 5.66
2012 70,205 31,876 9,916 336,058 153,458 601,513 5,010 110,562 273,409 3,970 328,104 601,513
2013 77,348 34,336 12,246 415,809 168,130 707,868 11,699 120,310 323,331 3,970 384,536 707,868
2012 57,316 1,112 42,692 (9,427) 91,693 (84,128)
2013 56,155 3,083 50,351 2,661 112,250 (130,371)
(84,128) (7,173) 90,372 (19,463) (43,896) 19,840 27,405 7,565 1.91
(130,371) 16,437 22,929 (22,462) 8,359 25,263 7,142 (18,121) (4.56)
2012 25.3 28.8 26.7 66.5 70.4 50.3 27.0 29.9 40.5
2013 5.9 5.9 (17.6) 63.9 70.5 48.1 25.0 26.2 44.5
2014E 245,402 (120,079) 125,323 (38,599) 167,048 80,324 86,724 (7,681) 3,974 83,017 (32,884) 4,167 (32,622) 114 21,791 5.53 5.53 50,397 12.69 3.50 2014E 87,455 23,532 13,159 467,634 170,878 762,658 11,700 139,350 337,790 3,970 424,868 762,658 2014E 21,791 (4,167) 80,324 6,368 104,316 (132,148) (132,148) 19,042 32,550 (13,895) 243 37,940 10,108 (27,832) (7.01) 2014E 9.1 5.4 (60.7) 51.1 68.1 35.3 8.9 20.5 39.6
2015E 198,771 (117,184) 81,587 (32,750) 130,373 81,536 48,837 (7,080) 3,500 45,257 (18,103) 0 3,009 150 30,313 7.64 7.64 27,304 6.88 3.50 2015E 85,270 19,060 12,842 484,905 165,564 767,641 45,457 96,288 326,343 3,970 441,298 767,641 2015E 30,313 0 81,536 2,298 114,148 (98,808) (98,808) (9,305) 150 (13,884) 5,513 (17,525) (2,185) 15,340 3.86 2015E (19.0) (22.0) 38.2 41.0 65.6 24.6 15.3 13.7 40.0
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 8 of 9
2016E 215,407 (115,531) 99,876 (35,517) 143,929 79,570 64,359 (5,176) 3,500 62,683 (25,073) 743 0 150 38,502 9.70 9.70 37,760 9.51 3.69 2016E 89,534 20,655 12,661 500,719 160,556 784,125 41,832 95,500 318,955 3,970 465,170 784,125 2016E 38,502 (743) 79,570 (3,814) 113,516 (95,384) (95,384) (4,413) 150 (14,631) 5,025 (13,869) 4,264 18,132 4.57 2016E 8.4 10.4 27.0 46.4 66.8 29.9 17.9 17.5 40.0
DISCLAIMER This document is produced using open sources believed to be reliable. However, their accuracy and completeness cannot be guaranteed. The statements and opinions herein were formed after due and careful consideration for use as information for the purposes of investment. The opinions contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. The use of any information contained in this document shall be at the sole discretion and risk of the user.
KT ZMICO RESEARCH – RECOMMENDATION DEFINITIONS STOCK RECOMMENDATIONS BUY: Expecting positive total returns of 15% or more over the next 12 months OUTPERFORM: Expecting total returns between ‐10% to +15%; returns expected to exceed market return over six months period because of specific catalysts UNDERPERFORM: Expecting total returns between ‐10% to +15%; returns expected to below market return over six months period because of specific catalysts SELL: Expecting negative total returns of 10% or more over the next 12 months
SECTOR RECOMMENDATIONS OVERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to outperform the relevant primary market index by at least 10% over the next 12 months. NEUTRAL: The industry, as defined by the analyst's coverage universe, is expected to perform in line with the relevant primary market index over the next 12 months. UNDERWEIGHT: The industry, as defined by the analyst's coverage universe, is expected to underperform the relevant primary market index by 10% over the next 12 months.
REFER TO DISCLOSURE SECTION AT THE END OF THE NOTES page 9 of 9
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KT•ZMICO Securities Company Limited
st
8 , 15 -17 , 19 , 21 Floor, Liberty Square Bldg., 287 Silom Road, Bangrak, Bangkok 10500 Telephone: (66-2) 695-5000
Phaholyothin Branch
rd
Fax. (66-2) 631-1709
Ploenchit Branch
th
nd
2
Sindhorn Branch
3 Floor, Shinnawatra Tower II,
8 Floor, Ton Son Tower,
1291/1 Phaholyothin Road,
900 Ploenchit Road, Lumpini,
Floor, Sindhorn Tower 1, 130-132 Wireless Road, Lumpini,
Phayathai, Bangkok 10400
Pathumwan, Bangkok 10330
Pathumwan, Bangkok 10330
Telephone: (66-2) 686-1500
Telephone: (66-2) 626-6000
Telephone: (66-2) 627-3550
Fax. (66-2) 686-1666
Fax. (66-2) 626-6111
Fax. (66-2) 627-3582, 627-3600
Nakhon Pathom Branch 1156 Petchakasem Road, Sanamchan Subdistrict, Amphoe Meuang , Nakhon Pathom Province 73000 Telephone: (034) 271300 Fax: (034) 271300 #100
Chachoengsao Branch
Viphavadee Branch
Phitsanulok Branch
G Floor, Lao Peng Nguan 1 Bldg.,
Krung Thai Bank, Singhawat Branch
333 Soi Cheypuand, Viphavadee-Rangsit Road,
114 Singhawat Road,
Ladyao, Jatujak, Bangkok 10900
Muang, Phitsanulok 65000
Telephone: (66-2) 618-8500
Telephone: 083-490-2873
Fax. (66-2) 618-8569
th
Chonburi Branch
Pattaya Branch
108/34-36 Mahajakkrapad Road,
4 Floor, Forum Plaza Bldg.,
382/6-8 Moo 9, T. NongPrue,
T.Namuang, A.Muang,
870/52 Sukhumvit Road, T. Bangplasoy,
A. Banglamung, Cholburi 20260
Chachoengsao 24000
A. Muang, Cholburi 20000
Telephone: (038) 362-420-9
Telephone: (038) 813-088
Telephone: (038) 287-635
Fax. (038) 362-430
Fax. (038) 813-099
Fax. (038) 287-637
Khon Kaen Branch
5th Floor, Charoen Thani Princess Hotel,
Hat Yai Branch
Sriworajak Building Branch
200/301 Juldis Hatyai Plaza Floor 3,
1st – 2nd Floor, Sriworajak Building, 222
260 Srichan Road, T. Naimuang,
Niphat-Uthit 3 Rd,
Luang Road, Pomprab,
A. Muang, Khon Kaen 40000
Hatyai Songkhla 90110
Bankgok 10100
Telephone: (043) 389-171-193
Telephone: (074) 355-530-3
Telephone: (02) 689-3100
Fax. (043) 389-209
Fax: (074) 355-534
Fax. (02) 689-3199
Central World Branch
Chiang Mai Branch
Phuket Branch
999/9 The Offices at Central World,
422/49 Changklan Road, Changklan
22/61-63, Luang Por Wat Chalong Road,
16th Fl., Rama 1 Rd, Pathumwan,
Subdistrict, Amphoe Meuang,
Talat Yai, Mueang Phuket,
Bangkok 10330
Chiang Mai 50100
Phuket 83000
Telephone: (66-2) 673-5000,
Telephone: (053) 270-072
Tel. (076) 222-811,(076) 222-683
(66-2) 264-5888 Fax. (66-2) 264-5899
Fax: (053) 272-618
Fax. (076) 222-861
Pak Chong Branch
Cyber Branch @ North Nana
173 175, Mittapap Road,
Krung Thai Bank PCL, 2 Floor, North Nana Branch 35 Sukhumvit Rd.,Klong Toey Nua Subdistrict , Wattana District, Bangkok 10110 Telephone: 083-490-2871
Nong Sarai, Pak Chong, Nakhon Ratchasima 30130 Tel. (044) 279-511 Fax. (044) 279-574
Nakhon Ratchasima Branch
Bangkhae Branch
6th Floor The Mall Group Building Bangkhae 275 Moo 1 Petchkasem Road, North Bangkhae, Bangkhae, Bangkok 10160 Tel. (66-2) 454-9979 Fax. (66-2) 454-9970
624/9 Changphuek Road, . Naimaung, A.Maung, Nakhon Ratchasima 30000 Telephone: (044) 247222 Fax: (044) 247171 Information herein was obtained from sources believed to be reliable, but its completeness and accuracy are not guaranteed. All opinions expressed constitute our views on that date and are not intended as an offer or solicitation to sell or buy any securities. Investors should exercise care when making a decision to invest in securities. No one may modify or distribute any part of this report unless written permission is first received from Seamico Securities Plc. If any modifications are made, quotes or references taken from the report and the report date must be clearly mentioned and must not cause misunderstanding or damage to the company.
