Kasikorn Securities believed OR has the financial capacity for a buyback of around 5-6 billion baht or a special dividend that could significantly increase its yield. The firm recommended “BUY” with a target price at THB 14.3 per share.
Kasikorn Securities cited the report from Kaohoon Daily News dated March 28, there have been rumors that PTT Oil and Retail Business Public Company Limited (SET: OR) is planning a share buyback following its parent company, PTT, which is currently in the process of buying back its own shares. However, the company has denied making any decisions yet, although it admitted that it is studying methods to enhance its stock value, including options like share buybacks or paying special dividends.
The securities company stated that it believes OR has the capability to conduct a share buyback if it chooses to, as it reported a cash balance of 47 billion baht at the end of 2024. The firm estimated the buyback capacity to be around 5-6 billion baht, or approximately 3-4% of the shares. Meanwhile, issuing special dividends is also a feasible option. In 2024, OR paid a dividend of 0.4 baht per share, equivalent to a payout ratio of 63%, resulting in a dividend yield of only 3%. Utilizing the 5-6 billion baht for special dividends could increase the yield to 6-7%.
Kasikorn Securities maintained its “Buy” recommendation with a year-end 2025 target price of 14.3 baht, anticipating a 39% recovery in the company’s net profit in 2025, driven by: 1) Increased sales volume from efforts to gain retail oil market share; 2) Improved oil margins as the state oil fund gradually recovers; and 3) Reduced asset impairment expenses.
