The share price of Prima Marine Public Company Limited (PRM) plunged ฿0.25/share or 2.82% to ฿8.60/share as analysts expected the share price to reflect the impact from Tipco Asphalt Public Company Limited (TASCO) after being too dependant on its supplier.
TASCO could see a drop in revenue by 50% after the U.S ordered the company to wind down its crude oil procurement from Venezuela by the end of November 2020 and warned that it could face a sanction if not compromised.
TASCO’s asphalt refinery in Kemaman, Malaysia is specifically designed to refine heavy crude oil from Venezuela. Since its commissioning in 2007, 90% of the refinery’s feedstock was sourced from Venezuela. TASCO would suffer a huge loss from being too dependent on its crude oil from Venezuela and Malaysian refinery.
PRM also relied heavily on its fleet in transporting petroleum for PTT Group by sea. More than half of PRM’s revenue was contributed from serving PTT Group. Thus, analysts estimated that the plummet in share price could be a negative sentiment from TASCO for being “too dependent” on its supplier, while it might be possible that PTT Group could create its own fleet to replace PRM.