Tisco revises down SCC's 2009-10 earnings estimates

 The brokerage house expected the conglomerate to book Bt24.8 billion in 2009, or a 7.3 per cent annualised drop from the expected earning of Bt26.75 billion in 2008. However, the  2010 forecast is Bt27.6 billion, or a 11.3 per cent growth rate.

 Tisco has raised the 2008 net profit estimate by 7 per cent, to reflect better than expected petrochemical and paper spreads in the first nine months of this year.

 In the third quarter of this year, it expected SCC to show an improvement in earnings due to a seasonal increase in demand for petrochemicals and the wider margin in paper business.However, earnings from its cement and building product divisions should weaken due to a slowdown in construction activity caused by the rainy season and recent political tensions.

 While 2009 earnings should slow from 2008, growth would resume in 2010 when its petrochemical capacity doubles from the start-up of its second cracker.

"Despite unexciting earnings in 2008 and 2009, its bottom line should be supported by: 1) higher margins on cement, paper and

ceramic tiles following price hikes; 2) capacity expansion from its investments

during the past few years; and 3) cost savings from its waste heat generator," the house said.

SCC ended the morning trading session on Monday at Bt135. Tisco expected its price to range Bt184-Bt223 in the local board, and Bt193-Bt234 in the foreign board, based on the revised 2009 earning forecast.