Indorama Ventures Public Company Limited (SET: IVL) is looking to the end of 2021 and into next year, expecting demand for IVL’s products to remain robust across the portfolio, bolstered by continued economic recovery.
The company reported a net profit of 6,548 million baht in 3Q21, increased 1,622% from a net profit of 380 million baht in 3Q20. The increase was mainly due to higher revenue in the period, especially the revenue from sale of goods that rose 56% from 81 million baht in 3Q20 to 126 million baht in this quarter.
Moreover, IVL recorded lower impairment loss of PPE in 3Q21 at 10 million baht, compared to 268 million baht in the same period last year.
FSS International Investment Advisory (FSSIA) has given a “BUY” recommendation on IVL with a target price at ฿62.00/share.
FSSIA expected IVL’s net profit to rise in 4Q21-2022 on stronger product margins and higher utilisation rates for the IOD, PET-PTA, and fibre groups, with QoQ improving MTBE and MEG margins. Key potential drivers are: 1) a stronger PET-PTA margin due to China’s lower export volumes and solid demand; 2) a polyester fibre margin recovery for the automotive and lifestyle segments; and 3) the start-up of its ethane cracker in November 2021 after the lightning strike in 2H20.
Meanwhile, Maybank Securities (Thailand) (MBKET) has also given a “BUY” recommendation on IVL with a target price at ฿57.00/share.
MBKET expected 4Q21 earnings to remain at a high level QoQ despite the low season, thanks to benefiting from China’s Dual Control Policy which helps limit PET production, leading to tight supply, coupled with selling price adjustment and closing deal with Oxiteno in 1Q22, adding to upside risks.
