Upstream energy stocks and refineries stand out. Many companies hit new quarterly highs. Delivering good profits in the first half of the year 65, driven by selling prices. and benefit from the Russian conflict In addition, the energy crisis in the EU interferes with the energy market for higher energy efficiency. As petrochemicals are pressured by raw material costs, the epidemic – Assessment Analysts’ Zero Covid Policy soaring coal demand Because it is the fuel used to generate electricity, BANPU is the most prominent, followed by LANNA and AGE.
From the survey results of institutions such as the International Energy Institute. The world’s energy consumption data is recorded all the time. The information gathered will be useful in studying global energy trends and planning future energy use. It was found that the use of fossil fuels increased the most in the years 2000 – 2008 and October 2012, the International Energy Institute. It was found that the use of coal is half of the world’s energy consumption. But today’s use of renewable energy has been found to be more used.
Currently, energy costs are increasing. As a result, the industry faces more challenges, and the most obvious now is the trade protectionism measures caused by carbon emissions. circulating and change the use of fuel, so there is more
In addition to the problems from the conflict between Russia and the West, including the outbreak of the epidemic, at the same time, the EU agreed to reduce gas consumption by 15%, so measures taken around the world will affect energy consumption. and some events resulting in different positive and negative effects for operators both inside and outside the home Of course, the different energy companies that analysts estimate are not much different. For looking at stocks in the ENERGY & PETROCHEMICAL group, weight is POSITIVE and “Neutral. Reiterating that the refinery will stand out And agree that coal and diesel are in continuous demand, so Banpu Public Company Limited or BANPU and AGE are the most prominent, as well as LANNA or Lanna Resources Public Company Limited and AGE or Asia Green End Company. Nergie Public Company Limited, while PTT group hold and wait for dividends.
Coal Upstream Energy – Bright Natural Gas
Yuanta Securities (Thailand) or Yuanta Securities Looking at ENERGY & PETROCHEMICAL stocks with “Neutral” recommendation, expects 2Q19 net profit totaling 13.6 billion baht, a remarkable growth of 42% qoq and 41% yoy, which is a continuation of growth from the previous year or for 7 consecutive quarters. while the earnings of upstream energy stocks and the distillery will stand out. Many companies hit new quarterly highs. Supported by selling prices benefited from the Russian conflict.
Petrochemical stocks will be pressured by raw material costs, the epidemic – China’s Zero Covid policy and new production capacity to the market. The prospects for profits in the first half of the year 65 will come out well, especially in the upstream energy – refinery sector, so we expect such stocks to be attractive from a high average of 3% dividends for the first half of the year.
While this year’s Q2 earnings may be the highest point of the year with 3QTD energy prices, especially oil. because the refining value began to decline Consequently, the refinery’s performance in the third quarter of this year will decline compared to the previous quarter. And there is a risk of stock loss. However, the upstream group is expected to maintain a good profit base because of the lag-time of selling prices and no stock losses. As a result, upstream energy stocks are the most attractive in the next 3 months. By coal producers – natural gas looks better than oil producers. because it benefits from the conflict between Russia and the West more And the chance of being interfered with the populist policy is lower, therefore, BANPU has been chosen as the dominant stock because it has a portfolio of main business being coal. -Natural gas. In the second half of 2022, XTO Energy will be merged and the coal price will be adjusted.
coal demand and strong diesel
Krungsri Securities Recommend “POSITIVE” ENERGY SECTOR stocks after meeting the energy crisis in the EU because the EU plans to intervene in the energy market to curb rising electricity prices. which will draw a share of excess profit and set the gas price ceiling This may separate electricity pricing from gas prices. and use other, less expensive energy sources instead. EU energy crisis is expected to support coal and diesel fuel as a substitute for diesel in electricity generation Government to intervene before winter energy crisis EU plans to intervene in energy markets to curb soaring prices which will have to draw the share of excess profit and set the gas price ceiling In the EU energy system, wholesale prices for electricity from the final power plant are required to meet overall demand.
Wind, nuclear, coal and gas power plants have submitted bids. in the energy market Power plants with the lowest bid are allocated first, and then to more expensive sources of energy, such as gas. Usually it is the power plant that determines the price of electricity in this system. which according to this concept Every electricity supplier will sell electricity at the same price. Therefore, renewable energy producers with lower costs will have higher profit margin The structure was established to incentivize investment in Renewable energy projects in Europe are increasing to meet global warming targets. The share of natural gas used to generate electricity ranges from 15-25%, depending on the cost of technology.
In addition, the EU is considering measures to separate electricity prices from gas prices. to use other, cheaper sources of energy instead That, in line with the draft guidelines, recommends EU member states to draw their share of the skyrocketing profits of non-gas electricity companies. to help reduce the burden on consumers’ electricity bills The highest price ceiling for non-gas-fired power producers will be set. and rocking excess profits above that level which is a similar system with the windfall tax. The EU leaders have promised that Intervene will only be a short-term action. and announced that it would undertake long-term structural reforms around the new year EU energy ministers will discuss the proposal in September. while Spain and Portugal The price ceiling has been set since June, and the two countries agreed with the committee last month. April to set the gas price ceiling nature used to generate electricity It separates the price of electricity from the price of gas. It has been in use since June. and will be effective until May 2023, with an average price ceiling of 48.80 EUR/MWh.
Krungsri Securities The assumption of Dubai crude oil price 2022-2023 remains unchanged at US$100/90 and coal demand is expected to and diesel will continue to be strong Throughout the coming winter
Coal prices are stable, gas is likely to decrease
Land and Houses Securities Recommend “NEUTRAL” Energy & Petrochemical Sector stocks because of weak momentum Due to the high volatility of crude oil prices The supporting factor is supply. Tightened by oil sanctions from Russia But there is a pressure factor from concerns about the prospect of a recession. GRM has recovered from a recovering gasoline spread and petrochemical spreads. Aromatics line increased markedly due to lower naphtha prices. and tight supply led to higher product prices.
For the view of investing in this group of stocks is Crude oil prices remained highly volatile Dubai last week fell 6% WoW to $92.2/barrel from $97.9 the week before. from concerns about the prospect of a recession after the central banks of various countries Speeding up interest rates to curb inflation The price of crude oil this week continues to fluctuate. by recovering from tight supply after Russia threatened to halt oil and natural gas exports to Europe If price-limiting measures are taken, Russia’s energy prices and the EU are expected to impose sanctions on Russian oil on Dec. 5, but fell back on Tuesday on expectations the Fed would raise interest rates after high inflation. than expected
While GRM is recovering, Singapore GRM last week was $8.4/barrel, recovering from $6.1 last week. This was mainly driven by gasoline spreads recovering from $6.4/barrel to $10.9 as demand from India and Vietnam and gasoline inventory fell to an eight-week low.
The spread of aromatics petrochemicals rose remarkably. Spreads for aromatics petrochemicals rose sharply last week as naphtha prices dropped -1%WoW and PX, BZ prices rose due to tight supply from turnarounds. And it’s entering the PTA demand season.
However, coal prices remained stable. natural gas prices fall The price of coal remained stable at the same level. While natural gas prices fell after Europe tried to find other ways. to reduce the impact of natural gas imports from Russia It was found that it sold more heavily in the previous week, where NVDR sold its main energy shares up to -4.8 billion baht, mainly selling upstream energy shares PTTEP -2.2 billion baht., PTT -1.0 billion baht, and BANPU -1.0 billion. baht, but still buys in the TOP +465 million baht. The percentage of foreign holdings is the most sold in BANPU -0.47%, followed by PTTGC -0.21%.
Therefore, we recommend outstanding stocks such as PTT, waiting to win dividends. Environmental factors in energy stocks are starting to weaken. Although oil prices have recovered after falling to a certain level. But there is no pressure from foreign purchasing power to support. Expect high payouts based on profits First half growth and strong financial position
Upstream energy stocks have high gains.
KTBST Securities Energy stocks give “Neutral” advice after the EU agrees to cut gas consumption by 15% -Mar 2023 Compared to the 2017-2021 average, the European Commission (EC), which is responsible for drafting the EU law, initially proposed the same 15% reduction in gas consumption for all countries, but some countries, such as Spain, Poland and Greece. Finally, European governments have allowed some countries to reduce or cancel their binding targets. In addition, countries that exceeded the EU’s gas reserves target in August can request a lower target.
Meanwhile, gas reserves remain a challenge for energy security at the end of the year, according to Gas Infrastructure Europe (GIE) (an independent non-profit organization). 2022 at 722 Terawatt hour (TWh), which is about 65.0% of total gas reserves. The EU aims to increase reserves to 80% by November to Support for the winter that will come at the end of the year However, this goal remains challenging as the EU is facing a heat wave phenomenon which is causing higher demand for electricity.
Therefore, KTBST Securities There is a positive view of the energy sector on the news, stating that the gas reduction plan may not be enough to cover the potential supply cuts. It is estimated that if the EU can reduce gas by 15 % according to the EU plan, it will be able to reduce gas demand by 45 billion cubic meters (bcm) in the period from August 2022 – March 2023, compared to The Russian gas supply to the EU before its invasion into Ukraine at 155bcm per year (about 40% of the EU’s gas demand).
Therefore, the investment weight is still maintained. “Equal to the market” for the energy sector We maintain our optimistic view on upstream energy stocks that benefit from high energy prices, preferring BANPU (BUY/Target Bt16.00) and PTTEP (BUY/Target Bt190.00), which have reported strong second-quarter earnings. from high energy prices (oil, coal, and natural gas) affected by Russian sanctions and lower-than-average global reserves. and likely to benefit from the trend of high energy prices from the energy shortage issue in the second half of this year
Coal spurts to use to generate electricity
Ms. Wilasinee Boonmasungsong, Research Director Globlex Securities Company Limited (GBS) assessed the direction of the Thai stock market last week. The CPI is expected to rise to 8.1% in August year on year. This slowed compared to 8.5% in July, indicating inflation had passed its highest level. The trend of raising interest rates by the US Federal Reserve (Fed) next time may reduce the heat.
However, the Fed previously commented that a single month of slowing in the CPI was not enough. It also signaled a policy rate hike to curb inflation that was much higher than target. Therefore, the Fed is expected to raise interest rates by 0.75% to 3-3.25% at its meeting on September 20-21, while The CME Group’s FedWatch Tool indicates that investors are weighing up to 90% that the Fed will raise interest rates by 0.75% and weight only 10% that the Fed will raise interest rates by 0.50%. Energy stocks supported the movement of the index to swing within the range of 1620-1670 points.
Suggest investment strategies that benefit from the energy crisis in both Europe and China. Recently, China has a shortage of electricity. Because the water in the dam can not produce electricity. Therefore, it turned to use coal to generate additional electricity to compensate for the lost electricity from the dam. The stocks that are expected to benefit from such factors are PRM or Prima Marine Public Company Limited, VL or V.L. Enterprise Public Company Limited, BANPU or Banpu Company Limited. (Public), LANNA or Lanna Resources Public Company Limited and AGE or Asia Green Energy Public Company Limited