Brokers see PTTGC-SCGC joint venture as long-term strength, recommend trading PTTGC with a 48 baht target

Thunhoon··TH·Read original
3▲2 ▼0Impact / 5
Summary · why it matters

Asia Plus Securities research has issued an analysis of PTTGC and SCC shares after both companies notified the Stock Exchange of Thailand of progress in their feasibility study on a strategic joint venture between PTTGC and SCGC in the olefins and polyolefins business in Thailand. The two parties have reached a preliminary agreement on the scope of the joint venture, or JV Scope. PTTGC is expected to be the major shareholder in the joint venture, while SCGC will retain a significant stake in the venture. The research team views this JV as a strategic reset for PTTGC during the downturn phase of the petrochemical cycle, helping to reduce downside risk from investing in new capacity expansion in a market that is in a state of oversupply and building leadership in the region's petrochemical business. PTTGC will reinforce strengths on the upstream and feedstock flexibility side, while SCGC will reinforce downstream, HVA and R&D. For SCC shares, the research team views that the key issue is not holding less than 50%, but rather the value of synergies and the economic returns from the JV. Not consolidating the financial statements may make the balance sheet more efficient, and petrochemical business profit would shift from recognition through EBITDA to equity income. The research team recommends trading PTTGC shares with a target price of 48 baht and recommends buying SCC shares with a fair value of 310 baht. Both companies will finalize key transaction details, such as the shareholding structure, operational steps and synergies, by the end of October 2026. The joint venture remains subject to internal approval by both companies, the final valuation and approval from shareholders and joint venture partners.

Impact on assets 2

Materials▲ · 1 stocks
PTT Global Chemical Public Company Limited
PTTGC
▲ PositiveCapitalrelevance

Broker recommends trading PTTGC with a 48 baht target, viewing the SCGC joint venture as a strategic reset that reduces downside risk in the petrochemical downturn.

Climate Adaptation & Water▲ · 1 stocks
The Siam Cement Public Company Limited
SCC
▲ PositiveCapitalrelevance

Broker recommends buying SCC shares with a 310 baht fair value, citing JV synergies and a more efficient balance sheet from not consolidating.

Off-coverage companies 1

SCG Chemicals Public Company Limited (SCGC)Private▲ Positive
Capitalrelevance

SCGC is a party to the olefins/polyolefins joint venture with PTTGC, retaining a significant stake and contributing downstream, HVA and R&D strengths.

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