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PTT Global Chemical (PTTG.BK/PTTGC TB)*: Downgraded on absence of new catalysts

We downgraded PTTGC to Neutral, from Outperform, with an unchanged target price of Bt75.00. Since our initial coverage in October 2011, the share price has risen 60% and outperformed SET by 30%. After attending last Friday’s analyst meeting, we see no catalyst to upgrade our target price in the short-term as we expect earnings to be capped by a series of shutdowns while overall chemical spreads should remain stable in 1H12. As a result, upside potential to our target price is now limited for the next few months. However, we may turn more positive again in 2H12 if PTTGC is able to run all plants at its target utilization rate of 90% or there is a strong improvement in HDPE spread.

L.P.N. Development (LPN.BK/LPN TB): Revised up 2012-13 earnings on low-rise expansion
We reiterate our rating of Outperform on LPN with a new target price of Bt15.50, from Bt14.90. We revised up 2012-13 earnings by 4.2% and 4.0% to Bt2.3bn and Bt2.6bn, respectively, to reflect LPN’s low rise business expansion through its subsidiary, Pornsanti. The company’s 2H12 performance should be stronger than 1H12 as most of its projects are to be completed in 4Q12. Nevertheless, we believe its new project launches and pre-sales during 1Q12 to 3Q12 would be key catalysts to the share price.

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