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STOCKS
DARANA CHUDASRI
Thai energy stocks remain relatively inexpensive compared with their regional peers, according to local analysts.
Tanaporn Visaruthaphong, who covers energy for Kasikorn Securities, said that based on closing prices of last Friday, the price-to-earnings ratio for the Thai energy sector compared favourably with their counterparts in the region.
Coal producer Banpu traded last Friday at 12 to 13 times earnings, compared with 18 times for regional peers. PTT Exploration and Production was also trading at 12 to 13 times earnings, in line with other regional energy firms.
Thailand's five listed refineries, however, were priced at five to seven times earnings, compared with nine times for the region. PTT Plc, the country's largest oil and gas company, was trading at eight times earnings, compared with regional valuations of 10 times.
Ms Tanaporn said KSEC currently favoured PTTEP and Banpu as outperformers. ''PTT is interesting, but has risk due to its price subsidies. It remains uncertain how long PTT will be required to subsidise LPG prices,'' she said.
PTT chief executive Prasert Bunsumpun last week said state-mandated price subsidies would cost the company 63 billion baht this year.
PTTEP, the exploration arm of PTT, continues to have upside potential from its Natuna field in Indonesia, Ms Tanaporn said. While exploration and production costs have risen sharply in recent months, the company's EBITDA (earnings before interest, taxes, depreciation and amortisation) remained high at 70%, with fair value for the company estimated at 216 baht per share, excluding potential gains from its new Indonesian field.
For Banpu, fair value was estimated at 590 baht per share at the end of the year, as demand for coal is expected to increase through mid-2010.
Chaipat Thanawattano, deputy head of research for Tisco Securities, said the company rated PTTEP, Banpu and Thai Oil as outperformers with dividend yields as high as 10%.
He said PTT also remained an interesting stock despite the cost of its gas subsidies, particularly as it stood to benefit from higher dividends from PTTEP.
PTTEP closed yesterday at 174 baht, down eight baht, and PTT lost eight to 290. Banpu fell eight baht at 472 and Thai Oil lost 50 satang to 50.50 baht.
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