Asia Plus Securities has upgraded its recommendation on TASCO shares to "speculative buy" from "sell" and raised its fair value to 17.70 baht from 16.00 baht, reflecting stronger profit prospects from elevated asphalt prices. The research team expects TASCO's third-quarter 2026 results to show a net profit of 400 million baht, up 123% from the same period a year earlier but down 5% from the previous quarter, driven by a recovery in the asphalt business after the company managed to import crude from Venezuela in two shipments in August, adding feedstock to support exports and offsetting the seasonal softening of the domestic market. Total asphalt sales volume is expected at 290,000 tonnes, up 17% quarter on quarter, while the average selling price rose 8% quarter on quarter in line with Singapore asphalt market prices, which are being supported by tight regional supply. Although revenue is growing strongly, margins in the third quarter of 2026 remain under pressure from hedging losses on light oil products as well as additional provisions for doubtful debts from the construction business. However, the research team expects the fourth quarter of 2026 to be the best quarter of the year, thanks to the full-quarter recognition of the positive impact of sharply accelerating asphalt prices since September, while pressure from hedging losses on old light oil sales contracts made since the start of the year gradually eases after most of the impact was recognised in the third quarter of 2026. As a result, the research team raised its 2026 and 2027 profit forecasts by 24% and 3% respectively on the assumption of higher-than-expected asphalt prices, with the Argus Asphalt price recently reaching 800 US dollars per tonne, reflecting a supply deficit that continues to underpin the global asphalt market. Nevertheless, the research team remains cautious about the medium-term profit outlook, since current asphalt prices are still being driven by tight supply, which could gradually ease if the Middle East situation relaxes, while crude procurement from Venezuela is still done through traders, making costs higher than buying directly from PDVSA as in the past.
Tipco Asphalt Public Company LimitedAsia Plus upgraded TASCO to speculative buy and raised its fair value to 17.70 baht on stronger profit prospects from elevated asphalt prices.
