PTT Oil and Retail Business (OR) shares will begin trading on the Stock Exchange of Thailand (SET) on Thursday, with analysts suggesting a fair value of 22 baht per share based on the company's fundamentals.
UOB Kay Hian Securities Research has determined the OR price at 22 baht, up 4 baht or 22.2% from the initial public offering (IPO) price of 18 baht.
OR is the retail arm of state oil and gas conglomerate PTT Group and Thailand's largest oil and non-oil retail business. Analysts expect earnings to recover by 34.6% in 2021 through growth in all business segments.
The firm will be able to achieve long-term growth from having a larger network of domestic and international businesses and by improving profitability from its non-oil business expanding domestically and internationally, says the research firm.
OR operates 2,297 PTT stations, of which 1,968 are in Thailand and the remainder in Cambodia, Laos, Myanmar and the Philippines, according to company data as of September 2020.
OR's non-oil business includes Cafe Amazon with 3,440 outlets, of which 3,168 are in Thailand and the remainder are abroad.
The company also operates 2,046 Jiffy and 7-Eleven convenience store, of which 1,960 are domestic and 86 international.
It has 60 Fit Auto stations of which 56 domestic and four international.
The company has also partnered with franchises including 73 Texas Chicken branches, 73 Hua Seng Hong Dim Sum branches and 173 Pearly Tea outlets.
Analysts at UOB Kay Hian expect the number of coffee cups sold by Cafe Amazon outlets to continue growing by 9.82% per year, from 264 million in 2019 to 384 million in 2022, along with an increase of Cafe Amazon outlets.
OR would have solid earnings despite the Covid-19 outbreak, the research house said.
"We forecast OR to post 12 billion baht net profit in 2021, up 34.6% from the year before as we expect a recovery in operations in all segments, including the oil, non-oil and international business thanks to hope generated by the Covid-19 vaccines," the research stated.
This is in line with its business plan to expand by 108 petrol stations per year and its plan for Cafe Amazon outlets to hit 5,300 by 2025.