PTTEP TH SDR - Stock Analyst Research

Target Price*-
Recommendation ACCUMULATE
Market Cap*-
Publication Date5 Jun 2023

*At the time of publication

PTT Exploration and Production Public Company Limited (PTTEP) - FY23 profit seen slightly lower than FY22 on lower oil prices

Investment merits
Even though we expect PTTEP’s FY23 profit will be slightly lower than the level achieved in FY22 on the prospects that oil prices will come off their peak reached in FY22, more upside to our FY23 target price of Bt190/share however gives us an excuse to upgrade our rating on PTTEP to ‘BUY’ from ‘ACCUMULATE.’



FY23 profit seen slightly lower than FY22 on lower oil prices
We expect PTTEP’s FY23 profit will be slightly lower than what it achieved in FY22 on the prospects that oil prices will come off their peak reached in FY22. As we fine-tune our key assumptions for FY23 based on updated oil price projections, we revise upward our FY23 net profit forecast for PTTEP to Bt65,044mn but the new profit target still implies a drop of 8.3% y-y. Our new forecast assumes that Dubai crude oil prices will average US$85/bbl in FY23 on expectations that rising demand from China’s economic reopening will be a key driver of oil prices, and sales volumes will rise to 470 KBOED in FY23 from 467 KBOED in FY22 based on management’s guidance. Most of the sales volume growth would come largely from (1) the ramp-up of production from the Erawan (G1/61) project, which produced around 210 MMSCFD of gas as of end-FY22, and (2) the Bongkot (G2/61) project, which is currently producing at a minimum volume level stated in the production sharing contract (PSC) of 200 MMSCFD. For the Erawan (G1/61) project, PTTEP expects gas production to be ramped up to 400 MMSCFD in mid-FY23 and 600 MMSCFD by endFY23 and full production capacity of 800 MMSCFD to be reached in Apr FY24. The construction and installation of new platform in the Bongkot (G2/61) project is now underway with drilling of development wells to prepare for the transition from existing concession block B16 and B17 as part of the efforts to boost gas production volume to 700 MMSCFD in Mar FY23. Unit cost is estimated at around US$27.7/BOE in FY23, down from US$28.3/BOE in FY22 on expectations that sales volumes will increase and royalty expenses will decline following the transition of Block B16 and B17 from concession to the production sharing contract (PSC).


FY23 exploration budget set at US$223mn
PTTEP has set an exploration budget of US$223mn for FY23. Of the total, US$193mn will go to CAPEX and the remaining US$30mn to OPEX. The CAPEX will be spent on the drilling of 17 appraisal wells, of which 11 are in Malaysia, five in Thailand and one in Oman. The Sarawak SK401B project in Malaysia with the expected production capacity of 1,000 MMSCFD is likely to reach FID within this year.


FY23 target price maintained at Bt190/share
We maintain our FY23 target price of Bt190/share for PTTEP. The target is based on a DCF valuation, assuming a WACC of 8.25% and a terminal growth rate of 2%. Following FY22 earnings release, PTTEP announced a 2HFY22 dividend of Bt5/share, taking the
full-year dividend to Bt9.25/share. The stock will go ex-dividend (XD) on Feb 14. In our view, PTTEP is viewed as one of the consistent dividend-paying stocks in the energy space with a five-year average trailing dividend payout of Bt5.90/share during FY18-
FY22. Please see Figure 1 for more details.


About the author

Phillip Research Team (Thailand)

Contact us to Open an Account

Need Assistance? Share your Details and we’ll get back to you


This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  


Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066