STOCK FOCUS
PTT Chemical
Phatra Securities has upgraded its recommendation on PTT Chemical shares to "buy", with a price objective of Bt92 apiece.
The broker has a bullish view on the petrochemical sector over the next two years as a result of an Iranian olefins-crackers delay. With one of the biggest upstream olefins crackers in the region, PTT Chemical is set to benefit significantly.With a utilisation rate of more than 100 per cent and a 10-per-cent capacity increase in this year's second quarter, PTT Chemical is expected to post the strongest quarter-on-quarter earnings improvement among its peers. Given its net profit margin of 23.5 per cent and net cash position, PTT Chemical will likely maintain an annual dividend payment of at least Bt5 a share. Due to a 72-day maintenance shutdown in the first three months of this year, 2007 earnings should decline 3 per cent year on year.
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