On Friday at 11:09 AM (Bangkok time), the share price of The Siam Cement Public Company Limited (SET: SCC) dropped by 1.67% or THB 4.00 to THB 236.00, with a trading value of THB 423.44 million.
DBS Vickers Securities (DBSVS) highlighted that SCC continues to grapple with challenges in the petrochemical sector due to an oversupply condition and weak demand from China, which is anticipating the impact from the recently announced stimulus measures.
The company’s performance outlook for the fourth quarter of 2024 is also overshadowed by several difficulties: 1) a decline in PE margins to under $300 per ton, the lowest level since 2007, attributed to a decrease in PE prices to below $900 per ton, the lowest since 2019; 2) an increase in material costs such as Naphtha, pressuring the overall outlook of the company; and 3) a rise in oil prices, potentially leading to losses from oil inventories for the company.
Therefore, the analyst downgrades its 2024 and 2025 profit forecasts for SCC by 29% and 14%, respectively, and revises down the company’s rating from ‘BUY’ to ‘Hold’, setting a base price of THB 267 per share.
