Advanced Set to Dethrone PTT as Largest Thai Firm on Oil Slump

Tale of Two Biggest Thai Companies
Advanced Info poised to dethrone PTT as biggest Thai company by market value

Thailand’s Advanced Info Service Pcl is poised to end PTT Pcl’s 12-year reign as the country’s biggest company by market value.

Advanced Info, controlled by Temasek Holdings Pte of Singapore, was worth 681 billion baht ($19 billion) at Tuesday’s close, 5 percent less than the state-controlled oil and gas company. That’s approaching the narrowest gap between the two since 2003. PTT shares have plunged 23 percent this month as oil prices tumbled.

“It’s panic selling in global energy stocks, including PTT, because the industry faces hardship through 2016,” said Naphat Chantaraserekul, the head of research at Krungsri Securities Pcl. “Telecom companies, especially Advanced Info, are a safe haven because cell-phone use has become fairly price-resistant, no matter the economic outlook.”

Once bolstered by the near monopoly in Thailand’s oil and gas industry, PTT and its units including PTT Exploration & Production Pcl have been battered as oil dropped below $40 per barrel this week, from more than $100 per barrel barely a year ago. PTT’s shares have slid 24 percent in the past 12 months, while Advanced Info has gained 11 percent during the period.

By revenue, PTT remains the largest Thai company by far. Its $87 billion in 2014 sales ranked it among the top 80 companies worldwide and was five times more than no. 2, PTT Global Chemical Pcl, according to a data compiled by Bloomberg. Advanced Info’s sales of $4.6 billion ranked 16th among SET-listed companies.

PTT’s average price target for the next 12 months is 361 baht, 43 percent higher than the closing on Tuesday, according to a Bloomberg survey of 21 analysts. Advanced Info’s average target is 265 baht, a 16 percent rise from yesterday’s close.

PTT’s net income in the second quarter dropped 19 percent to 23.75 billion baht. Advanced Info’s profit in the same period jumped 16 percent to 9.85 billion baht.

An index of 40 energy explorers, refiners and drillers on the Standard & Poor’s 500 Index lost $17 billion in value, sinking 5.2 percent Monday in New York to the lowest level since October 2011.

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