Reuters: Hot Stocks: STOCKS NEWS THAILAND-Citi raises target price on Thai Oil

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STOCKS NEWS THAILAND-Citi raises target price on Thai Oil May 2nd 2012, 03:26 Tue May 1, 2012 11:26pm EDT Citigroup raised its target price on Thai Oil Pcl, Thailand's biggest oil refiner, to 78 baht ($2.54) from 75 baht ($2.44) and maintained its buy rating. The brokerage expected the earnings outlook for Thai Oil in 2012 to remain positive thanks to higher paraxylene output from August 2012 -- a completion of aromatics upgrading project, inventory gain, and corporate tax saving. Thai Oil shares were trading up 2.6 percent at 69.25 baht by 0325 GMT. They have gained around 18 percent so far this year. Thai Oil's valuation looked attractive at 8.7 times 2012 estimated price to earnings versus regional peer average of 11.3 times, Citigroup said. The refiner would also benefit from a lower corporate tax rate of 23 percent this year, compared with the normal 30 percent rate. "TOP has derated by 12 percent from its 2012 peak in February, partly reflecting its crude disadvantage versus Singapore gross refining margin (GRM). However, we believe near-term earnings should be largely supported by inventory gain and lower effective tax rate," the broker said in a report dated April 30. (Reporting by Viparat Jantraprap in Bangkok; Editing by Kim Coghill; viparat.jantraprapaweth@thomsonreuters.com) ($1 = 30.75 baht)

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