Company Coverage
Thai Oil (TOP TB): Strong Core Earnings Supported By Resilient Market GRM
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt63.00
Bt66.00
+4.17%
Bt50.00
Analyst
Analyst
Highlights
- We forecast 2Q26 net profit at Bt7.52b (-61% qoq), primarily due to stock losses. Excluding inventory effects, core profit is expected to improve significantly qoq, supported by resilient market GRM.
- The government's second round of diesel ex-refinery price cuts in 3Q26 is expected to have a limited earnings impact but heightens concerns over continued government intervention and policy uncertainty.
- Maintain HOLD. Target price: Bt66.00 (previous TP: Bt50.00).
Analysis
- 2Q26 net profit to decline qoq despite robust core earnings. We expect Thai Oil (TOP) to report 2Q26 net profit of Bt7.52b, down 61% qoq but up 16% yoy, primarily due to a substantial stock loss. Excluding one-off items, core profit is expected to improve significantly qoq, supported by a sharp recovery in market gross refinery margin (GRM). Despite the impact from the Ministry of Energy's first-round diesel ex-refinery price cuts during Apr–May 26, which reduced GRM by around US$2.60/bbl.
- Market GRM strengthened sharply in 2Q26. We forecast 2Q26 core profit of Bt19.04b, increasing significantly both qoq and yoy. This is driven by an estimated market gross integrated margin (GIM) of US$23.50/bbl, underpinned by a market GRM of US$20.50/bbl (vs US$14.80/bbl in 1Q26 and US$7.00/bbl in 2Q25). The improvement was supported by tighter global product supply following the Iran-US conflict, the temporary closure of the Strait of Hormuz, and lower middle distillate exports from China and Russia. As a result, gasoline, gasoil, and jet fuel spreads increased by 200% qoq, 78% qoq, and 73% qoq, respectively.
Highlights
- We forecast 2Q26 net profit at Bt7.52b (-61% qoq), primarily due to stock losses. Excluding inventory effects, core profit is expected to improve significantly qoq, supported by resilient market GRM.
- The government's second round of diesel ex-refinery price cuts in 3Q26 is expected to have a limited earnings impact but heightens concerns over continued government intervention and policy uncertainty.
- Maintain HOLD. Target price: Bt66.00 (previous TP: Bt50.00).
Analysis
- 2Q26 net profit to decline qoq despite robust core earnings. We expect Thai Oil (TOP) to report 2Q26 net profit of Bt7.52b, down 61% qoq but up 16% yoy, primarily due to a substantial stock loss. Excluding one-off items, core profit is expected to improve significantly qoq, supported by a sharp recovery in market gross refinery margin (GRM). Despite the impact from the Ministry of Energy's first-round diesel ex-refinery price cuts during Apr–May 26, which reduced GRM by around US$2.60/bbl.
- Market GRM strengthened sharply in 2Q26. We forecast 2Q26 core profit of Bt19.04b, increasing significantly both qoq and yoy. This is driven by an estimated market gross integrated margin (GIM) of US$23.50/bbl, underpinned by a market GRM of US$20.50/bbl (vs US$14.80/bbl in 1Q26 and US$7.00/bbl in 2Q25). The improvement was supported by tighter global product supply following the Iran-US conflict, the temporary closure of the Strait of Hormuz, and lower middle distillate exports from China and Russia. As a result, gasoline, gasoil, and jet fuel spreads increased by 200% qoq, 78% qoq, and 73% qoq, respectively.
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt63.00
Bt66.00
+4.17%
Bt50.00
Analyst
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
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