Thai Oil Public Co. Ltd.

Overview Key strengths Key risks Strong domestic position with about 30% refining market share in Thailand on average. Operations in a cyclical, commoditized, and capital-intensive industry with high energy transition risk. Integration with parent supports operating efficiency, feedstock supply, and output offtake. Leveraged balance sheet of above 5.0x due to high and inflexible capital outlays. Refinery flagship status within the group enables parent support. Majority of earnings are derived from a single-site facility. We forecast Thai Oil's EBITDA will be Thai baht (THB)23 billion–THB24 billion annually in 2022 and 2023, excluding any impact from stock gains and losses. This will be backed by favorable spreads on refined products, supported by a recovery in demand for domestic travel and tourism as

...The earnings of Thai Oil Public Co. Ltd. will gradually resume to pre-COVID levels backed by continued recovery in demand. We forecast Thai Oil's EBITDA will be Thai baht (THB)23 billion¡THB24 billion annually in 2022 and 2023, excluding any impact from stock gains and losses. This will be backed by favorable spreads on refined products, supported by a recovery in demand for domestic travel and tourism as Thailand eases border restrictions. We also expect the aromatics sector to remain largely supportive despite a weakening outlook in benzene and paraxylene spreads due to regional capacity addition. Normalizing olefins spreads also suggests that the dividend contribution from Thai Oil's recent acquisition of Indonesia-based petrochemical producer, PT Chandra Asri Petrochemical Tbk. (Chandra Asri; not rated), will not add significantly to Thai Oil's cash flows. We expect Chandra Asri's dividend...

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