The analyst expects PTT Oil and Retail Business, or OR, will record a sharp drop in net profit in 2Q23 due to weakening demand, however the company should experience an improvement in the last three months of the year thanks to higher sales volume from a peak season and long holidays.
Daol Securities forecasts OR’s profit for the second quarter to be THB2.6 billion, down 61% year over year and 13% quarter over quarter due to a decline in marketing margin and other revenue.
The brokerage anticipates a slowdown in domestic sales in the third quarter due to the expected drop in demand caused by the rainy season. However, 4Q23 should see an increase in sales volume due to the abovementioned high season and several long holidays.
Daol continues to advise investors to BUY OR with a price target of THB25.00.
Regarding the outlook for the entire year, Daol maintains its net profit forecast of THB11.9 billion, as well as THB13.5 billion for 2024. Adding more gas stations and convenience stores should be beneficial to the company in terms of sales volume and lifestyle business revenue, and it should also help the business take advantage of economies of scale, resulting in a reduced SG&A to sales ratio.
