The share price of Star Petroleum Refining Public Company Limited (SET: SPRC) rose 4% to THB10.30 per share after trading mostly at THB9 on mounting pressure that the company might need to set some provision for the oil leak incident in late January, which could potentially weigh on 1Q22 results.
The company stated that it has insurance coverage under property damage and business interruption, marine cargo, and third party liability, but the market is anticipating that it could take months to claim those coverage from the insurance.
KTBST Securities has given a “BUY” recommendation on SPRC with a strategic target price at THB10.50 per share, seeing positive profit momentum in 2022 from higher refining margin and oil prices.
According to the management, SPRC is expecting a higher volume of crude oil feeding into its refinery around 10-14%, compared to the same period of last year, as global demand for oil consumption is increasing in 2022 amid reopening borders, along with recovering crack spread.
KTBST estimates SPRC’s 2022-23 net profit at 4.5 billion baht and 5.1 billion baht, respectively, representing a decline of 3.4% and a growth of 12%.
According to a consensus from Refinitiv, SPRC’s revenue is expected to grow 3% and 4.82% in 2022-23, respectively. Meanwhile, net profit is expected to decline 17% in 2022, compared to 2021, but will increase 22.33% in 2023 at 4.8 billion baht.
