On Monday at 11:00 AM (Bangkok time), the share price of Indorama Ventures Public Company Limited (SET: IVL) jumped by 8.37% or THB 1.80 to THB 23.30, with a trading value of THB 1.27 billion.
Krungsri Securities (KSS) projects that IVL will make a turnaround by achieving a profit of THB 1.41 billion in 3Q24, in stark contrast to the THB 195 million profit recorded in the same period of 2023 and the THB 22.99 billion loss incurred in 2Q24.
IVL’s main business segments, namely Indovinya, Combined PET, and Fibers, are anticipated to experience a boost in demand. This surge is attributed to the forthcoming road trip season in the US, as well as the increased margins from MTBE, a substance used in conjunction with gasoline, and surfactants demand during the crop season.
The profitability of PET plastic, utilized in the production of plastic bottles, is also expected to rebound due to a slowdown in global supply. Additionally, IVL has been gradually phasing out low-profit margin businesses, leading to a tighter supply scenario.
Meanwhile, IVL was removed from the index in the latest rebalancing. The company’s short-term performance is expected to benefit from China’s efforts to boost its property sector. Despite the limited impact of the loan refinance initiatives for housing, the analyst foresees positive momentum for the company propelled by optimistic market expectations for upcoming stimulus measures in the next phase.
Beyond Securities is forecasting a significant turnaround for IVL, with expected profits ranging between THB 5-6 billion in the second half of 2024. This positive outlook is attributed to reduced costs resulting from restructuring efforts, the company’s performance in the latter half of 2024, and the resumption of operations at the ethylene factory in the US.
The company is projected to unveil a profit of THB 8 billion in 2025, driven by yearly cost savings of THB 4.6 billion. Furthermore, the analyst expects IVL to achieve a profit of THB 10 billion in 2026, supported by enhanced margins and capacity.
Beyond Securities sees a rise in IVL’s share price to THB 25 per share within 6-12 months, with further growth anticipated to reach THB 30-35 per share by the end of 2025. This upward trajectory is attributed to a sustained recovery in profit for the company.
