FSS Rates “BUY” on OR with TP of ฿41, Expecting a Solid Growth throughout 2023

Finansia Syrus Securities (FSS) has given a “BUY” recommendation on PTT Oil and Retail Business Public Company Limited (OR) and a target price of ฿41.00/share in anticipation of CAGR growth at 21.8% in 2020-23 with 3 key drivers: 1) the expansion of its fuel stations in Thailand; 2) growth in its non-oil F&B businesses, particularly its Café Amazon outlets and the number of CVS outlets; and 3) the expansion of its overseas presence in new existing markets to leverage OR’s core business value of the one-stop shop with a “Living Community” concept to offer “more than just a service fuel station” experience for customers.


Mr. Suwat Sinsadok, Managing Director of Finansia Syrus Securities, said despite a weakening net profit in 2020 due to coronavirus impact, he believed OR’s earnings will grow at 21.8% CAGR in 2020-23, driven by its three growth strategies as mentioned. 


For the Café Amazon outlook, FSS forecasted the number of cups sold to rise from 295 million in 2020 to 519 million in 2023. Most of the growth in cups sold would be in Thailand, thanks to the higher growth potential in the number of outlets, for both standalone and in-station outlets. 


Meanwhile expecting to see a demand recovery in 2021-23, and projecting the growth in cups sold to be 54.6m in 2021, 82.2m in 2022, and 87.2m in 2023, driving up its EBITDA growth to 25% CAGR in 2020-23 at 20.9 billion baht and its net profit to 49% CAGR at 8.6 billion baht in 2023.


FSS also believed that OR has a strong growth potential to expand its business footprint overseas, not only as a fuel station business but also as an F&B segment to penetrate new markets and grow its presence in existing markets. OR has also expanded its business into ASEAN and other Asian markets, leveraging its business model of integrated oil and non-oil ventures at its fuel stations.

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