Company Coverage
Bangchak Corporation (BCP TB): 2Q26: Record Earnings Reinforce Our Positive View
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt44.50
Bt52.00
+16.9%
-
Analyst
Highlights
BCP reported a core profit of Bt12.2b (+878% yoy, +25% qoq), driven by resilient refining margins, a stronger marketing performance and the first commercial contribution from its SAF business. Results were broadly in line with our estimates.
We also anticipate earnings momentum remaining strong in 2H26.
Maintain BUY with a target price of Bt52.00.
Analysis
- Strong operational earnings driven by refining and SAF. Bangchak Corporation (BCP) reported a record high core profit in 2Q26 at Bt12.2b (+879% yoy, +25% qoq), in line with our forecast, supported by a still-robust gross refinery margin (GRM) of US$18.40/bbl, higher marketing margin and first quarter contribution from the SAF business following commercial operations in May. The 1H26 results account for 64% of our full-year forecasts. All operating numbers are in line with our and market estimates.
- Refinery performance remained the key driver for 2Q26. Although refinery utilisation eased to 93% (from 95% in 1Q26) due to temporary diesel export restrictions, BCP maintained a strong core GRM of US$18.40/bbl (1Q26 US$18.60/bbl) supported by strong diesel and jet fuel cracks. Meanwhile, the marketing business improved as marketing margin rose to Bt1.26/litre (1Q26: Bt0.73/litre) partly offsetting lower sales volumes (-14% qoq).
- Government intervention had limited impact. Lower refinery utilisation (93%) reflecting a temporary diesel price cap weighed on refining, but these were largely offset by a strong GRM, improved trading performance and growing contributions from the non-refining businesses. Note that we expect a minimal impact of Bt1.1b in 3Q26 from the second-round diesel cap (Jul Aug 26)
- Biofuel earnings improved in 2Q26. The government's return to the B7 diesel blend from mid-March boosted biodiesel demand, with BCP’s B100 sales volume rising 22% qoq to 115.5m litres. The higher blending requirement, together with improved biodiesel margins, supported BCP's biofuel EBITDA to Bt794m (+5,000% yoy and 95% qoq). We remain positive on the outlook in 3Q26, supported by the potential extension of the B7 mandate with the government's plan to promote B10 for passenger vehicles and B20 for heavy-duty trucks, which should provide further upside to biodiesel demand and margins.
- SAF margins remain favourable. We believe BCP's SAF business should benefit from a healthy SAF-UCO spread, which has remained above historical averages, allowing the plant to contribute impressive earnings in 2H26. We believe SAF is expected to become a meaningful long-term earnings contributor for BCP.
Highlights
BCP reported a core profit of Bt12.2b (+878% yoy, +25% qoq), driven by resilient refining margins, a stronger marketing performance and the first commercial contribution from its SAF business. Results were broadly in line with our estimates.
We also anticipate earnings momentum remaining strong in 2H26.
Maintain BUY with a target price of Bt52.00.
Analysis
- Strong operational earnings driven by refining and SAF. Bangchak Corporation (BCP) reported a record high core profit in 2Q26 at Bt12.2b (+879% yoy, +25% qoq), in line with our forecast, supported by a still-robust gross refinery margin (GRM) of US$18.40/bbl, higher marketing margin and first quarter contribution from the SAF business following commercial operations in May. The 1H26 results account for 64% of our full-year forecasts. All operating numbers are in line with our and market estimates.
- Refinery performance remained the key driver for 2Q26. Although refinery utilisation eased to 93% (from 95% in 1Q26) due to temporary diesel export restrictions, BCP maintained a strong core GRM of US$18.40/bbl (1Q26 US$18.60/bbl) supported by strong diesel and jet fuel cracks. Meanwhile, the marketing business improved as marketing margin rose to Bt1.26/litre (1Q26: Bt0.73/litre) partly offsetting lower sales volumes (-14% qoq).
- Government intervention had limited impact. Lower refinery utilisation (93%) reflecting a temporary diesel price cap weighed on refining, but these were largely offset by a strong GRM, improved trading performance and growing contributions from the non-refining businesses. Note that we expect a minimal impact of Bt1.1b in 3Q26 from the second-round diesel cap (Jul Aug 26)
- Biofuel earnings improved in 2Q26. The government's return to the B7 diesel blend from mid-March boosted biodiesel demand, with BCP’s B100 sales volume rising 22% qoq to 115.5m litres. The higher blending requirement, together with improved biodiesel margins, supported BCP's biofuel EBITDA to Bt794m (+5,000% yoy and 95% qoq). We remain positive on the outlook in 3Q26, supported by the potential extension of the B7 mandate with the government's plan to promote B10 for passenger vehicles and B20 for heavy-duty trucks, which should provide further upside to biodiesel demand and margins.
- SAF margins remain favourable. We believe BCP's SAF business should benefit from a healthy SAF-UCO spread, which has remained above historical averages, allowing the plant to contribute impressive earnings in 2H26. We believe SAF is expected to become a meaningful long-term earnings contributor for BCP.
BUY (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Bt44.50
Bt52.00
+16.9%
-
Analyst
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