On Thursday at 11:00 AM (Bangkok time), the share price of Thai Oil Public Company Limited (SET: TOP) decreased by 3.35% or THB 1.75 to THB 50.50, with a trading value of THB 352.46 million.
Unpaid workers from Sinopec Engineering Group (Thailand) Company Limited (SINOPEC), an unincorporated joint venture (UJV) involving Petrofac, Saipem, and Samsung, who are working as the main contractors for the construction of a clean fuel project (CFP) for TOP, have staged protests over alleged non-payment. SINOPEC asserts that they have not received the agreed-upon compensation from the UJV whereas TOP has already completed the payment to UJV.
As of 2:00 PM (Bangkok time) on Wednesday, TOP has engaged with the protestors’ representative, relevant local authorities, and the UJV in negotiations to address the issue, which remains unresolved.
TOP has implemented measures to ensure the well-being of its staff and has taken steps to secure the refinery, while expressing hope for a resolution between the UJV and SINOPEC for the benefit of the protesting workers.
DAOL Securities (Thailand) has expressed a neutral view on TOP following the report and anticipates minimal impact on TOP’s operations from the protests, while highlighting potential risks of delay to the Clean Fuel Project (CFP) project if the demonstrations persist.
The securities firm projects TOP’s earnings in 2024 to reach THB 15.2 billion, a 22% decrease year-on-year due to the gradual normalization of market GRM, which remains robust. In the short term, TOP’s earnings for the second quarter of 2024 are expected to amount to THB 5 billion, marking a 349% annual surge but a 14% quarterly dip. The yearly profit increase is attributed to stock gains, while the quarterly decline is linked to the reduction in market GRM.
Looking ahead, DAOL Securities (Thailand) foresees the market GRM to rebound in the third quarter of 2024 amidst a dimming crude premium outlook. The firm maintains a ‘BUY’ recommendation for TOP and sets a target price of THB 65.00 per share.
