KGI Securities noted in its report regarding Bangchak Corporation Public Company Limited (SET: BCP). The analyst expects the company to report a 1Q25 net profit of 2.1 billion baht, representing a 13% year-over-year decline but a staggering 12,751% surge from the previous quarter.
The year-over-year drop is largely attributed to lower market gross refining margins (GRM), with the Phra Khanong refinery’s GRM projected at $5.5 per barrel, a 16% dip year-on-year, and Sriracha’s at $3 per barrel, a 39% drop. However, the quarter-on-quarter rise is anticipated to stem from reduced stock losses.
The Phra Khanong refinery is anticipated to report a stock gain of 184 million baht, recovering from a significant 1 billion baht stock loss in the last quarter, while the Sriracha is expected to show a smaller stock loss of 499 million baht, compared to a 1.2 billion baht loss previously.
Notably, the Phra Khanong refinery’s GRM is predicted to climb 9% quarter-on-quarter to $5.5 per barrel, driven by a shift in the Dated Brent-over-Dubai premium, which decreased from $1.11 per barrel to -$1.21 per barrel in 1Q25.
BCP’s oil marketing business is also anticipated to show slight improvement with a recovery in marketing margins by 7% quarter-on-quarter to 0.82 baht per liter, despite a 2% drop in oil sales volume.
With a downward revision of crude price assumptions amid an intensified U.S. trade war, the analyst downgrades BCP’s earnings forecasts by 24% to 4.4 billion baht in 2025 and 2% to 9.2 billion baht in 2026. The Phra Khanong and Sriracha refineries are now expected to record stock losses of 1.3 billion baht and 1.7 billion baht, respectively, in 2025, against previous zero loss projections. The Dubai crude price assumption has been adjusted from $75 per barrel to $70 per barrel for the year.
Additionally, the 2025 GRM forecast for the Phra Khanong refinery has been raised by 8% to $6.3 per barrel in 2025 and to $6.8 per barrel in 2026, influenced by a lower Dated Brent-over-Dubai premium adjustment to $0.5 per barrel this year and $1.0 per barrel next year. This is countered by downward revisions of jet oil and diesel spreads by $1 per barrel annually, to $16.0 and $17.0 per barrel for 2025 and 2026, respectively.
As a result, KGI Securities revises down BCP’s target price for 2025 to 40 baht from 42 baht per share, following earnings downgrades based on the Sum-of-the-Parts (SoTP) valuation. Nonetheless, BCP maintains an ‘Outperform’ status, supported by expected quarter-on-quarter earnings improvements in 1Q25 and the strategic acquisition of an 18.3% stake in BSRC through a share swap deal. The analyst chooses BCP as its top-pick stock in the Thai energy sector.
On Friday at 10:44 AM (Bangkok time), the share price of BCP rose by 1.46% or THB 0.50 to THB 34.75, with a trading value of THB 63.95 million.
